When Is Quad Witching? Dates and What to Expect
Demystify Quad Witching. Learn its significance, precise dates, and what market participants typically observe during this key financial event.
Financial markets are dynamic environments where participants manage investments. Certain periods within the financial calendar experience elevated activity, often around specific dates when various financial instruments reach their expiration or settlement points. This leads to concentrated trading as market participants adjust their positions.
Understanding Quadruple Witching
Quadruple witching refers to an occurrence where four types of derivative contracts expire simultaneously. This event happens four times a year, creating a convergence of expirations that influences trading dynamics. The term describes the collective expiration of stock options, stock index options, stock index futures, and single stock futures. While single stock futures have seen reduced trading in U.S. markets since 2020, the term “quadruple witching” persists, though it is sometimes called “triple witching” due to the diminished role of single stock futures.
The significance of these simultaneous expirations stems from the nature of derivative contracts. Their expiration requires market participants to take action: close out positions, allow contracts to expire, or roll them over into new contracts. This collective need to manage expiring contracts contributes to the unique market conditions observed during these periods.
Identifying Quadruple Witching Dates
Quadruple witching occurs predictably on specific dates each year, making it a regular feature of the financial calendar. This event consistently takes place on the third Friday of March, June, September, and December. These quarterly occurrences mean market participants can anticipate and prepare for the increased activity well in advance.
For example, in 2025, the quadruple witching dates are March 21, June 20, September 19, and December 19. The consistent timing allows market participants to easily identify these days regardless of the year, enabling exchanges, traders, and investors to schedule their activities around these concentrated expiration events.
Instruments Involved
Quadruple witching involves the simultaneous expiration of four distinct types of financial derivative contracts.
Stock options provide the holder the right, but not the obligation, to buy or sell a specific number of shares of an underlying stock at a predetermined price by a certain date. These contracts are commonly used for speculation or hedging against price movements of individual company stocks.
Stock index options grant the holder the right, but not the obligation, to buy or sell the value of an entire stock market index, such as the S&P 500, at a specified price. Unlike stock options, index options are typically cash-settled, meaning no actual shares change hands.
Stock index futures are agreements to buy or sell the value of a stock market index at a specific price on a future date. These contracts obligate both parties to fulfill the agreement and are often cash-settled.
Single stock futures are futures contracts where the underlying asset is an individual stock. These contracts obligate both parties to exchange a specified number of shares of a company for a price agreed upon today, with delivery occurring at a future date.
Market Activity During Quadruple Witching
During quadruple witching periods, financial markets typically experience increased trading volume. This surge occurs as market participants, including institutional investors and individual traders, actively manage their expiring derivative positions. They may choose to close out existing contracts, allow them to expire if out-of-the-money, or roll over their positions by closing current contracts and opening new ones with later expiration dates.
The last hour of trading on these days, often called the “quadruple witching hour,” can be particularly active. This concentrated period sees heightened trading as market participants finalize actions related to expiring contracts. While increased volume is a common characteristic, the impact on market volatility can vary; some analyses suggest that significant volatility is not always a direct outcome. However, increased activity can still lead to price swings, especially for underlying assets tied to many expiring contracts.