What is a triple witch day?
Although this sentence is assumed with witches in Shakespeare's Macbeth , the triple witch day has nothing to do with spells or caught and all related to supplies and closing bells. It is a financial term that refers to the last day of the quarter, when the contracts for shares, the possibilities of the index and future options will expire at the same time. Triple witches take place on the third Friday of every third month, in March, June, September and December. During the triple witch day, investors and traders have to decide whether to sell their possibilities or turn them into next quarter. If they did not take steps before the end of "Friday's validity", shares usually become worthless. As a result, the volume of shares traded these days is dramatically increasing. In fact, the value of stock options may increase or Fall days before Friday when traders are preparing for what to figure out. As with all market changes, these price fluctuations can mean good newsor bad news for investors.
The volume of trading and volatility, or how quickly the security changes in the value of security is particularly high during the last hour of trading on the day of triple witches. This time, currently from 3 to 4 hours. The eastern standard time is known as a triple witch hour. It's when the Hollywood scene is shouting and signaling on Wall Street Floors, because traders are trying to settle in front of the final bell.
Although intensive for daily traders, Triple Witying Day generally has a small impact on long -term investors. In fact, experts recommend investors to buy and hold to ignore this day. They claim that most of the fluctuations will be re -balanced after a week, and that driving into enthusiasm in trading on this day could be Lead for a wise decision.
Many experts also claim that this day becomes less dramatic than isHo name means for several reasons. The first is that the industry is taking steps to minimize the following chaos, including the distribution of terms of contract contracts to decrease at the beginning of the month. Experienced traders also settle before the contract is terminated and minimized the volume stressed on the day of triple witches.
Another reason why the day of triple witches, called "Freaky Friday" becomes less meaningful, is that the end of a quarter has now become a four -time witches. This is because futures per share - packages of one type of warehouse, with gambling traders about their future value - will also expire on the third Friday of the third month. This fourth option was presented at US trading in 2002.