Triple Witching: What It Means, and How to Use this Strategy

Triple witching is when stock index futures, stock index options, and stock options expire on the same day. Learn how to use the trade strategy & earn profit.

Open Account

Table of Contents

Have you ever heard of triple witching? It’s a popular strategy for trading stocks. The trade style is rare but can be helpful in making significant profits. 

Want to know how? In this blog, we will have a detailed study on the Triple witching options expiration strategy and how to use it. 

Introduction to Triple Witching

Triple Witching is a scenario in financial markets that makes trading most exciting and volatile. Triple witching is basically the days of the year when expiration of stock index futures, stock index options, and stock options take place simultaneously, all on the same day.

Triple witching occurs four times a year, specifically on the third Friday of March, June, September, and December. Traders globally prepare themselves for sudden price swings, increased volume, and unusual market activity. 

Investors and traders usually adjust or close out their expiring positions, which gives birth to volatility across major indices like the FTSE, DAX, Dow Jones, and S&P 500.

Whether you trade on the triple witching day or not, watching the days will help you in anticipating price behavior, volatility spikes, and short-term trading opportunities.

Example

On March 15, 2019, a triple witching day, trading volume on U.S. exchanges reached 10.8 billion shares, compared to a 20-day average of 7.5 billion. That’s not it, indices such as the S&P 500, Nasdaq, and Dow Jones all surged leading close to expiry week but stabilized on the actual day. Many traders took advantage of the market conditions at that time and made significant money. 

How to Use Triple Witching Trading Strategy

During triple witching days, stocks and indices saw rapid movements that too within seconds. Traders roll over or close their contracts during these days. Here is how traders can benefit from it.

Pre-Market Strategy:

Identify strike prices with high open interest and monitor futures for direction to plan the trades accordingly.

Midday Monitoring Strategy:

Watch volatility, liquidity, and institutional order flow throughout the day and plan the trade after seeing how the market reacts.

Trade in the Final Hour Strategy:

The final hour is the most sensitive. Most traders close the position at this stage. But advanced traders are those who trade the high volatility period and close big trades.

Triple Witching

Tips for Triple Witching Trading

Triple Witching options trading can be risky. Follow these steps to manage risk effectively:

Choose Strategy Wisely:

Arbitrage, gap trading, reversal trading, straddle trading, momentum trading, and scalping are some strategies used on triple witching trading days. Traders can select any of them, but be vigilant while selecting them. Because the strategy plays an important role in your overall profit or loss. 

Watch Triple Witching Charts:

Traders can identify dramatic spikes in volume, institutional trades, and opportunities by watching the charts. Popular indices such as the S&P 500 or Dow Jones observe sudden up and down moves within short timeframes. Short-term traders can identify potential opportunities by watching them. 

Monitor fundamental and Market Sentiments:

News and overall market sentiments can significantly change the market scenario during the triple witching days. Traders who keep an eye on overall market conditions can make informed decisions. 

Have Robust Risk Management:

Triple witching days have high volatility with sudden and significant price changes. Thus, traders should have a proper risk-to-reward ratio, position sizing, and strict exit rules.

Practice Demo Account:

Triple witching involves trading on unpredictable market conditions. The strategy requires indepth market knowledge and proper practice. So, before staking your money, first test yourself on demo accounts. 

What are the Next Triple Witching Dates 2025

Triple Witching happens four times a year, or once per quarter. The dates of Triple Witching Dates for 2025 are 21st March, 20th June, 19th September, and 19th December. 

Triple Witching vs. Quadruple Witching

Many traders confuse Triple Witching with Quadruple Witching. Earlier,  triple witching refers to the expiry of three contracts, including stock options, stock index options, and stock index futures. 

While Quadruple witching included one more contract, Single-Stock Futures. However, after 2020, the single stock futures stopped trading in the USA. So now both terms are used to define the same scenario. 

Wrapping Up

Triple Witching is one of the rare yet profitable trade strategies. Traders mark the dates and wait for days to trade the scenario. The strategy rewards a significant profit if used correctly.

However, not every trader can make money trading it. The strategy requires discipline, awareness, and experience. Nonetheless, even if you are not a tripe witching trader, monitoring the conditions will help you plan your trades smartly. 

Option and futures trading are quite complex for beginners. So at the initial stage, you can even go for CFD trading that offers more flexibility and convenience. Open a demo account with us to start stock CFD trading.

FAQs

Triple Witching is when stock options, stock index options, and stock index futures expire on the same day. It causes spikes in trading activity and high volatility.

Triple Witching happens on the third Friday of every quarter. The dates for 2025 are March 21, June 20, September 19, and December 19.

Triple witching happens on the third Friday of the quarter. So it may not happen today. 

Triple triple-witching days, major stock indices saw a significant price change. Short-term traders can watch the chart to predict the market and make money. 

Triple witching can be bullish or bearish depending on overall market conditions.

The last hour of trading on triple-witching days is called the “Triple Witching Hour”. These hour is known for wild fluctuations, rapid reversals, and massive trading volumes.