Friday’s trading session was a “quad witch” day for the market, which usually results in more volatility and can create more extreme moves higher or lower. A quad-witching day in the stock market refers to a third Friday of a month in which stock options, single stock futures, index futures, and index futures option derivatives all expire on the same day .
CC Lagator, the founder of OptionsAI, joined Benzinga’s PreMarket Prep last Friday morning to discuss the quad witching day and what it could mean for stocks.
“This deadline looks a little different than the last few,” Lagator said. “In the last couple of weeks leading up to this expiration, there’s a very strange situation where the market is basically sideways. The SPX is where it started in March, but if you’ve been doing intraday and day trading this has been an extremely volatile market .”
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According to Lagator, the SPDR S&P 500 Trust ETF TO SPY rose 2% in March. However, the index has had very volatile daily movements, as well as volatile intraday movements. For example, on Thursday last week, $SPY traded down more than 0.8% from its late afternoon opening price. But, with just 25 minutes left in the regular trading session, the index rallied more than 0.5%, closing more than $2 higher than the day’s lows.
Last Friday’s trading, characterized by quad-witching of several expiring contracts and futures, also saw increased volatility, with the S&P 500 falling more than 0.5% in a two-hour span from around 10:30 a.m. ET to 12:30 p.m. ET.
The remaining three days of quad-witching in the stock market will be June 21, September 20 and December 20 this year. Watch PreMarket Prep’s full interview with Lagator below.
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Image created using artificial intelligence with Midjourney.