What is witching hour?
In the stock market, it’s the final hour of trading on the third Friday of each month when options and futures contracts expire. Witching hours usually see significant volatility in trading volume and stock prices.
Where have you heard about witching hour?
The term ‘witching hour’ refers to the time of night in folklore when those who practice witchcraft are said to be particularly active and powerful. The expiration of options and futures has a lot of influence on the performance of the stock market.
What you need to know about witching hour.
There are double, triple and even quadruple witching hours to reflect the number of contracts that expire.
- Double witching is when futures and either index options or stock options are due to expire. It occurs on the third Friday of every month except March, June, September and December
- Triple witching is when stock options, stock futures and an index option or index futures contract expire at the same time. This happens on the third Friday in March, June, September and December
- Quadruple witching happens four times a year when three related classes of options and futures contracts expire, along with individual stock futures options
Because you know when witching hours will be, you can plan for the potential effects of them.
Find out more about witching hour.
For background information, read our definitions of options and futures.