TRIPLE-WITCHING EXPIRATION WEEK:

Not only is expiration week upon us, it’s triple-witching.

Equity options expire this Friday, but so do stock index futures and stock market index options. Some traders actually refer to this as quadruple-witching, because single stock futures also expire. Many expect a lot of volatility and increased volume during triple-witching expirations, as traders are closing contracts and offsetting their options and futures positions before the closing bell. Short term traders must be prepared for the expected increase in volatility and ensure all “stop loss” orders are in place. Additionally, this occasion presents opportunities to initiate new positions by placing bids at lower than expected levels in anticipation of unusually volatile price swings.