Friday is quadruple witching day

Discussion in 'Trading' started by BoyBrutus, Dec 14, 2006.

  1. Tomorrow is quadruple witching day

    with 0830 news
    Expected Previous
    0830 Nov CPI +0.2% -0.5%
    0830 Nov CPI, ex-food and energy +0.2% +0.1%


    Why dont people like to trade witching days?

    Can anyone provide some insight.

    Thanks
     
  2. I don't know anyone who avoids trading because it's a witching day. In fact, some of my all time best days have been on a witch.
     
  3. they've been a non-event for months.
     
  4. I expect a grinding day tomorrow. Do you think the big boys who made it this year will send in the return, head out early tomorrow and be done for the year?
     

  5. No reason to sell the market, no reason to exit positions. I think they just let there winners run, and see what the new year brings.
     
  6. Jaime

    Jaime

    Would someone please help me out, I know a little bit about the triple witching days, options are expiring, futures are coming off, or something along those lines. Would someone break it down and tell me the significance and what kind of moves I might expect to see today?

    Thanks a million.

    Jaime
     
  7. I remember hearing on TV that some traders trade spreads. For example if the spread between a SPZ06 future contract and the underlying Standard And Poors index value is great then a trader might sell future contracts and buy a group of stocks that correlates closely with the price behavior of the Standard And Poors index value. When the future contract is due to expire then the future contract might be bought and stock sold. I suspect no one knows exactly what strategies are used or how much buying and selling to expect. I recall sometimes prices change large percentages quickly and sometimes prices change little. Witching days are days when unusual forces appear in the marketplace as traders exit their positions on the last trading day before expiration.

    I fantasize that the value of the Standard And Poors 500 index might close higher this evening because the index rallied and closed higher yesterday. It is possible some traders exited their positions yesterday and caused prices to rally. It is only a fantasy, I can not predict the future reliably.
     
  8. Hi Jaime,

    I know your day trading ES and NQ.

    The game all December (usually is for December) is to hit the Eminis hard between 0930am - 1230pm est and then take it easy for the remainder of the trading day.

    In other words, that's when the strongest price action is occurring (0930am - 1230pm est) prior to the volatility dropping to difficult levels to trade.

    Yes, there's some price action after 1230pm est depending upon your trading style and your patience level.

    Simply, I expect today to be the same as it has been all week concerning the volatility.

    Also, just trade your trading plan.

    Thus, if you see something that merits a Long position...take it.

    If you see something that merits a Short position...take it.

    However, most veteran day traders have been doing size in the a.m. and reducing their positions dramatically in the p.m. trading session.

    I plan to read a book this afternoon.

    If I miss something...no biggie because the market will be here next week.

    Mark
     
  9. Jaime

    Jaime

    Thanks for the insights, I am taking the weekend off and just watching for a few days. I only like to trade when I have a fairly strong opinion on the general direction of the markets and I am pretty much disoriented these days.

    Happy trading :)
     
  10. Heres the option expiration for Friday 20th October Look how the ER dropped 10 points out the gate. You dont want to be on the wrong side of any moves.
     
    #10     Dec 15, 2006