What Is Quad Witching?
Quad witching—short for quadruple witching—refers to a quarterly event when four different derivatives contracts expire simultaneously:
- Stock index futures
- Stock index options
- Stock options
- Single-stock futures
These expirations all occur on the same Friday—the third Friday of March, June, September, and December—causing a surge in trading activity as investors roll over, settle, or close out positions.
The term “witching” draws from the phrase “triple witching,” an older version used before single-stock futures became widely traded.
When Does Quad Witching Happen?
Quad witching occurs four times per year, on these key Fridays:
- March (third Friday)
- June (third Friday)
- September (third Friday)
- December (third Friday)
In 2025, the quad witching dates are:
- March 21, 2025
- June 20, 2025
- September 19, 2025
- December 19, 2025
These dates are often circled on traders’ calendars because of the potential for increased volume and short-term volatility.
Why Quad Witching Matters
When multiple derivative contracts expire together, institutional investors and market makers must:
- Rebalance portfolios
- Close or roll over contracts
- Hedge exposures
This causes massive order flow, leading to sudden spikes in:
- Trading volume
- Bid-ask spreads
- Short-term volatility
However, despite the surge in activity, these effects are typically temporary and do not change long-term market trends.
How Quad Witching Affects Traders and Investors
1. Increased Volume
On quad witching days, trading volume across equities, ETFs, and futures can double compared to normal sessions.
2. Short-Term Volatility
The rebalancing of large institutional portfolios can cause abrupt price moves, especially during the last hour of trading—often called the “witching hour.”
3. Market Noise
Retail traders may mistake these movements for trend changes, but they’re usually the result of expiration-driven flows rather than fundamentals.
4. Arbitrage and Hedging Opportunities
Sophisticated traders sometimes exploit temporary mispricings between derivatives and underlying assets.
Quad Witching vs. Triple Witching
Before single-stock futures were introduced, markets experienced triple witching, involving only:
- Stock index futures
- Stock index options
- Stock options
Quad witching added single-stock futures to the mix, increasing the number of expiring instruments and amplifying trading activity.
While the mechanics are similar, quad witching typically generates slightly more volatility due to the extra derivative layer.
How to Trade During Quad Witching
Here are some key trading strategies and precautions:
1. Avoid Overreacting
Don’t confuse expiration-driven volatility with meaningful price trends. The majority of moves are short-lived.
2. Watch the Close
Most of the action occurs near market close as positions are rolled forward or squared off.
3. Manage Risk
Use stop-loss orders and consider reducing position sizes during these sessions.
4. Focus on Liquidity
High trading volume doesn’t always mean stable liquidity—spreads can widen unexpectedly.
5. Track Expiration Calendars
Keep an eye on the CME Group or NYSE expiration schedules to plan trades accordingly.
Is Quad Witching Bullish or Bearish?
Quad witching is neither inherently bullish nor bearish.
It is a mechanical event that causes temporary dislocations but rarely shifts the overall market direction.
However, in certain situations—like when major indexes sit near key technical levels—it can amplify moves, leading to false breakouts or exaggerated closes.
Historical Trends and Market Data
Analysts studying quad witching sessions have observed:
- Above-average volume but below-average returns on expiration days.
- Post-expiration stability, as volatility tends to normalize within 1–2 sessions.
- Occasional index rebalancing overlaps (like S&P quarterly adjustments) intensify the effect.
These patterns reinforce the idea that quad witching represents a liquidity event, not a predictive market signal.
Takeaway
Quad witching highlights how derivatives expiration mechanics can influence short-term price behavior.
For long-term investors, it’s best viewed as market noise, not a trading catalyst.
For short-term traders, however, it can offer unique opportunities—provided they manage risk carefully and avoid overtrading.
FAQs
Q: How often does quad witching happen?
Four times a year—on the third Friday of March, June, September, and December.
Q: What causes volatility during quad witching?
The simultaneous expiration of large derivatives contracts and portfolio rebalancing by institutions.
Q: Is quad witching good for day traders?
It can be, due to increased volume and price movement, but requires strict risk control.
Q: Does quad witching affect long-term investors?
Not significantly. Effects are usually short-lived and mostly impact intraday trading.
