Fridays' Triple Witch


Established member
I hear from a large US Fut & Options broker that they expect significant intra-day volatility on Friday especially if indices trade around strike prices.
Many people seem to take the view that the US market (SP) is setting up for the next significant move and that:
1. if market dips below 888 this would confirms bear market leading to much lower levels, but
2. if we move above Monday's close of 910, the/a "Santa rally" will be confirmed taking market up towards or perhaps beyond Dec 2 highs of 954.

How is the market set-up for Option expiry? When people seem to worry about the triple witch, it usually means if too many are concerned the market will remain range bound.

Are there members who can shed some light? Any Technical indicators pointing to one or the other?
Yep, there's always volatility in the markets at triple witching (every three months). However, I find that the day before, Thursday, is usually more of a roller-coaster ride than the Friday.

It's a brilliant opportunity for trading if a) you really know what you're doing b) you operate a rigid stop/reverse policy, and c) you get a kick from the adrenalin rush.

If you don't, then avoid the markets, and go and do some last minute Christmas shopping (scented candle and a blank signed cheque for me please).
Thanks for reply.
Yes, a couple of days' before expiry tend to be interesting. In fact volumes on back of roll-over's were already picking up yesterday.
However, as position trader, I am more concerned about the slightly larger moves. Fe should or shouldn't I put an Futures overlay on my 20 odd (carefully picked) shorts?
Any TA insight into what Friday's triple witch might bring would be welcome.