Quadruple Witching: Could Volatile Trading Spook Markets Friday?
Portfolio Pulse from Neil Dennis
Quadruple witching, now effectively triple witching due to the absence of single stock futures trading in the U.S. since 2020, refers to the simultaneous expiry of stock options, index futures, and index futures options. Occurring quarterly, this event can lead to increased trading volumes and market volatility. The SPDR Dow Jones Industrial Average ETF Trust (DIA) experienced heavy trading volumes and is up 14.8% since the end of October. The recent dovish pivot by the Federal Reserve may also contribute to market volatility as traders adjust their positions.
December 15, 2023 | 4:33 pm
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NEUTRAL IMPACT
The SPDR Dow Jones Industrial Average ETF Trust (DIA) has seen increased trading volumes due to the triple witching event and is up 14.8% since the end of October. The event and recent Federal Reserve actions may influence its short-term performance.
While triple witching can lead to increased volatility, the article suggests that these events now usually pass without much notice. However, the recent increase in DIA's trading volume and the Fed's dovish pivot could lead to short-term price fluctuations. The score is neutral due to the unpredictable nature of market reactions to such events.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80