Triple withcing is the when contracts for stock options, stock index futures, and stock index options expire.
This happens once a quarter on the third Friday of March, June, September, and December.
Understanding Triple Witching
Triple witching days generate trading activity and volatility because contracts that are allowed to expire may necessitate the purchase or sale of the underlying security. While some derivative contracts are opened to buy or sell the underlying security, traders seeking derivative exposure only must close, roll out, or offset their open positions before the close of trading on triple witching days.
Triple witching days, particularly the final hour of trading preceding the closing bell, known as the triple witching hour, can result in escalated trading activity and volatility as traders close, roll out or offset their expiring positions.
Since 2002, with the debut of single stock futures, there have been four types of expiring contracts, meaning triple witching days are often in fact a quadruple witching, though this term has not quite caught on.