If you’ve spent some time in the investing world, you have probably heard the terms “triple witching” and “quadruple witching.” But that doesn’t mean you know what they are or why they should concern you as an investor.

A triple witching day is when stock options, stock index options, and stock index futures all expire on the same day. A quadruple witching day is when stock options, stock index options, stock index futures, and single stock futures all expire on the same day.

These days happen on a quarterly basis, and the financial media usually makes a big deal out of it. Why? Because the expiration of these derivatives can, and will, cause increased volatility in the market.

If you are a short-term trader, you certainly need to be aware of witching days. They occur on the third Friday of March, June, September, and December. If you are a long-term investor, triple witching and quadruple witching days will have little impact on you. Just be aware that when they happen, the market may get a little crazy. When you’re prepared for some volatility, you won’t overreact.

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Inspired by his high school economics teacher, Rick Pendergraft fell in love with the markets at an early age. He entered his first investing competition at 17, and opened his first brokerage account before he finished college. At the age of 23, on the third options trade he had ever placed, Rick turned $1,800 into $22,000 in less than a week, when the company he bought became the target of a takeover. He admits it was a stroke of luck, but it was a memorable education as to the leverage that options can provide.
After a ten year career in banking, Rick decided to pursue trading full-time. To get his foot in the door, he started out in the sales department at Schaeffer’s Investment Research. It was not long before his talent was recognized and he was invited to apprentice under Bernie Schaeffer, one of the top options traders in the world. Rick thrived in his new position and twice received the award for “Top Trader.”Rick has developed a loyal following of readers who are grateful for his timely warnings and profitable advice. He is widely recognized as a market expert and has been frequently quoted by Reuters, BusinessWeek, Forbes, USA Today, the New York Times, and the Washington Post. Rick’s primary focus is on identifying short and intermediate term rising and falling trends in the major market sectors. His analysis is based on technical factors along with indicators of market sentimentRick lives near Delray Beach, FL with his wife and three children.