Triple Witching

What Futures Traders Need to Know for Tomorrow

What Is Triple Witching?

Triple witching is a key event in the futures and options markets that occurs four times a year—on the third Friday of March, June, September, and December.

During this time, stock index futures, stock index options, and stock options all expire simultaneously, creating a unique trading environment that every futures trader should understand.

Why Does Triple Witching Matter?

This convergence of expirations can lead to significant market activity, impacting liquidity, volatility, and execution quality. Understanding these dynamics is crucial for traders who want to navigate this period effectively.

What Happens During Triple Witching?

• Volume Surge: Trading activity often spikes as institutions roll over or close positions.
• Increased Volatility: Expect sharp and unpredictable price swings, especially near the open and close.
• Institutional Flows Dominate: Market behavior may deviate from typical technical patterns due to large institutional moves.

Implications for Futures Traders

• High Liquidity—but High Risk: While there’s plenty of activity, slippage and wider spreads are common.
• Execution Challenges: Rapid price changes can make order fills tricky.
• Short-Term Noise: Unusual moves may not align with your usual indicators.
• Important Note: The December contracts (e.g., ESZ25, MNQZ25) will stop trading at 8:30 AM Central Time and will cash settle based on a special settlement price that typically comes out closer to 9 AM Central.
• Learn more here: CME Settlement Information.

Trading Recommendations for Triple Witching

• Stay Disciplined: Avoid chasing moves; stick to your trading plan.
• Use Limit Orders: Helps control slippage in fast-moving markets.
• Reduce Position Size: Manage risk during volatile periods.

• Consider Scalping or Staying Flat: Experienced traders may use short-term strategies; others may prefer sitting out.
• Risk Warning: The last traded price or final traded price will rarely match the final settlement price. We do not recommend waiting for the final settlement. Exit any December positions prior to 8:30 AM Central tomorrow morning.

Bottom Line

Triple witching can present unique opportunities—but also significant risks. Preparation, discipline, and risk management are essential for success during this high-volatility period.