Hey 5-Star Trader,
It is impossible for us to know exactly what each day in the market will bring us, but there are certain days of the year that we know we should pay extra special attention to. Tomorrow is one of those days. Why? Because it’s quadruple witching hour.
What is quadruple witching hour?
Witching hour is a market phenomenon that only happens four times a year. This event occurs on the third Friday of March, June, September, and December when stock options, stock index futures, and stock index options all expire within the last hour of the market.
During witching week we typically see choppy behavior and trades you take on only have a few days until expiration. As a directional trader whose trades last an average of a few weeks, this is typically one of my least favorite events.
If you do choose to trade during this time, I would look for large-cap and high volume tickers with a lot of options activity. Some names would include Amazon (AMZN), Tesla (TSLA), Netflix (NFLX), or Facebook (FB).
Whether you are in or out this week, I suggest proceeding with caution, as the next few days could be unpredictable.