Triple Witching: What It Is and Why It Matters

Definition

Triple witching is the simultaneous expiration of three types of equity derivatives—stock options, stock index options, and stock index futures—on the same trading day. It occurs quarterly: on the third Friday of March, June, September, and December. The final hour of trading on those days is often called the triple-witching hour and commonly sees heightened activity.

Key takeaways

• Triple witching happens four times a year and can increase trading volume in the final hour of the trading day.
• Activity is driven mainly by traders closing, rolling, or offsetting expiring positions, which can create temporary price dislocations.
• Increased volume does not always translate into sustained volatility, but individual securities—especially smaller-cap stocks with large option interest—can move unusually.

How it works

• Offsetting and rolling futures: Owners of futures contracts typically avoid taking physical delivery by closing (offsetting) their position before expiration or by “rolling” it into a later month by entering a new contract.
• Expiring options and exercise/assignment: If options expire in the money, they trigger automatic exercise and resultant transactions between buyers and sellers (e.g., covered-call sellers may have shares called away). Traders can also close positions before expiration to avoid assignment.
• Final-hour dynamics: The rush to square or roll positions near the close concentrates orders and can amplify order imbalances, spreads, and short-term price moves.

Arbitrage, hedging, and price effects

• Arbitrageurs often target short-lived price inefficiencies created by heavy expirations, executing quick round-trip trades to capture small discrepancies.
• Gamma hedging by options market-makers can influence underlying prices. As option deltas change, market-makers buy or sell the underlying to remain hedged, which can push a stock’s price toward a heavily held strike price—a phenomenon called “pinning.”
• Pinning creates “pin risk” for option holders near expiration because it’s uncertain whether an option will finish in or out of the money and whether short positions will be assigned.

Triple vs. quadruple witching

“Quadruple witching” historically included single-stock futures in addition to the three contract types above. Single-stock futures ceased trading in the U.S. in 2020, so references today generally describe the same three-contract expiration event.

Example

On March 15, 2019 (a triple-witching Friday), U.S. exchanges traded about 10.8 billion shares—well above the 20-day average of roughly 7.5 billion. While market-wide indices showed gains leading into the week, much of the daily movement on the triple-witching Friday itself was modest, illustrating that higher volume does not necessarily mean large index moves.

Triple-witching dates (examples)

Triple witching occurs on the third Friday of March, June, September, and December. Example dates:
* 2025: March 21, June 20, Sept. 19, Dec. 19
2026: March 20, June 19, Sept. 18, Dec. 18
2027: March 19, June 18, Sept. 17, Dec. 17

Trading considerations and strategies

• Risk management: Expect wider spreads and possible price whipsaws near the close; use limit orders and appropriate position sizing.
• Avoidance: Less experienced traders may choose to avoid initiating new, large, or complex positions in the final hour.
• Strategy ideas (advanced traders):
• Arbitrageurs seek short-term mispricings between derivatives and underlying markets.
• Volatility strategies (e.g., straddles) can profit from large moves but carry higher risk and require careful management.
• Understand assignment risk: Holders of short options positions can be assigned if the option finishes in the money, so plan accordingly.

Bottom line

Triple witching is a predictable, quarterly event that concentrates derivative expirations and can increase trading volume and short-term price pressure, particularly in the final hour. Awareness of rolling, offsetting, gamma hedging, and pin risk helps traders and investors manage behavior and risk around these dates.