Quadruple Witching Day | Trading Game Plan June 19

 

quadruple witching day

Traders who gain valuable experience through trial and error, eventually create a trading plan that works-for them.

You will find certain patterns of when you make money and when you lose money.

This is where your trading journal can make the biggest difference, especially for a day trader. Day trading offers almost too many opportunities. You need to focus on your strengths and only risk money when the market is in your sweet spot.

For me, I don’t trade FOMC days or options expiration. I found I never made money. I like clean charts and no news. I will trade quadruple witching day very lightly, if at all. For me it works. I am OK letting everything else go.

How about you? What are your trading strengths?

Quadruple Witching Day: What is it?

DEFINITION of ‘Quadruple Witching’

The expiration date of various stock index futures, stock index options, stock options and single stock futures. All stock options contracts expire on the third Friday of each month and once every quarter – on the third Friday of March, June, September and December – all four asset classes expire on the same day. Because futures and options investors must close out of their positions on those days, they often witness increased trading volume.

INVESTOPEDIA EXPLAINS ‘Quadruple Witching’

The term “witching” comes from the fact that in the past, the expiration of futures and options contracts occurred not only on the same day, but at the same time. This often resulted in a period of greater-than-normal market volatility, which became known as the “witching hour.” Due to this increased volatility and frenzied market activity, many investors approach the markets differently on witching days.

Quadruple Witching History

The phenomenon of a quadruple witching is a relatively new innovation in the market place. Before the days of single stock futures, a triple witching hour would take place on the third Friday of each month that wrapped up a quarter. There was also the phenomenon of a double witching, which would usually involve stock market index futures and either stock market index options or stock options that were scheduled to expire.

In providing a name for this type of market event, the use of the term witching hour is based on folklore regarding a short period of time when those who practice witchcraft were said to be especially powerful and active. Since the expiration of these four types of contracts exerts a great deal of influence on market performance as the trading day comes to an end, the term is generally thought to be both appropriate and descriptive.

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Quadruple Witching Day: What to Watch on Wall Street June 19

For Friday, June 19 TheStreet outlines the Quadruple Witching day plus notable earnings, and key economic data to watch on Wall Street. The market may see extra volatility as all four asset classes, stock index futures, stock index options, stock options and single stock futures, expire on the same day.

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Futures and options investors must close out of their positions. Trading volume will likely be higher than normal. On the earnings front, we note quarterly earnings reports from used car company CarMax Inc (KMX) and homebuilding company KB Home (KBH). Both companies are scheduled to report before the market opens.

We also note one report on the economic calendar. The Atlanta Fed’s Business Inflation Expectations survey will be released. The survey gives a monthly measure of inflation estimates from the perspective of firms. The inflation expectations of firms are an important part of the inflation outlook and can guide the potential path of inflation. TheStreet’s Kurumi Fukushima reports in New York.

June 19 Stock Market Today: Map of the S&P 500

Day Trading Game Plan: The SPY

quadruple witching day

SPY chart shows a clean trend for most of the day. A pattern we discussed in our pre market game plan meeting yesterday.

quadruple witching day

Stocks to Trade |Friday June 19, 2015

Pete’s Notes:

  • The stock market keeps flip-flopping between long or short. I am neutral and stock specific—still.

Interesting Chart Lessons:

DIS |Disney and summer-time go hand-in-hand.

quadruple witching day

Earnings in play today > 1M avg shares: KBH, KMX

Bullish Ideas ATR/Volume/Price: AMBA, SINA, FEYE, CI, CYBR, LLY, MBLY, GILD, NFLX, TSLA, CRM, SWKS, GS, AMZN, DLTR,

Bearish Ideas ATR/Volume/Price: ual, rrc, uri, lng<70, sndk

Weak Stock Weak Close: cnx, hal, rdc, rrc,

Strong Stock Weak Close: lly, cybr

Weak Stock Strong Close: luv, dal, ppl, uri, ddd, fe, d, ed,

Strong Stock Strong Close: ABBV, AMBA, GILD, ADI, SUNE, TGT, UA, CRM, HBI, EA, LRCX>84, AMZN, TWX, XL, DIS, MA, ABT, CCL,

20 day Breakdown: bhi

20 Day Breakout: AMBA, TGT, HOG, DOW, BAX, ABT, XLF

2x Normal Volume: lo, orcl hlt, hog, rdn, amba, bhi, kr, xlf, cybr

Watch List Longs: TGT, SBUX, MET, COF, CVS, DIS, ABT, DOW, M,

Watch List Short: swn, cvx, wmt, cop, slb, hal, luv, qcom, intc, nue

Inside days: twtr, yhoo, cvx, qihu, vlo, cop, oxy, adbe, unh, adm, gt, tsla, tmus, aet, apc, hes, scty, cree


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Leave a Reply 2 comments

Anne West Reply

Great blog, good ideas. Very helpful early morning

    Pete Renzulli Reply

    Thank you Anne
    Happy to have you as a part of the team.
    Have a great day

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