#023 — Quadruple Witching
If there was an ideal time to buy, it would be near the third Friday in March, June, September, December
Yo!
Happy Monday! I hope you are gearing up for the upcoming year—you have 25 days to get ready.
Historically speaking, December is a month when the big boys unload the wagon. There is massive selloffs in preparation for the upcoming year when you will see them load back up.
There is something called Quadruple Witching. “Quadruple witching refers to a date on which stock index futures, stock index options, stock options, and single stock futures expire simultaneously.” — Investopedia.
These dates occur on the third Friday of every March, June, September, and December. We have already had 3 of those this year, but December is still on the way, which falls on the 18th.
On these dates, you will notice a selloff and market dip that implies that traders are exiting their positions. Now you would imagine they would exit earlier but the point still stands.
As we get closer, the more selloffs you will notice. Interestingly enough, that’s also the time to buy for the next quarter, year, or 2 years if you targeting leaps.
This is especially helpful if you are an options fanatic. When options expire, there is usually room for new expiration dates. As these dates become available, you want to grab them before other traders do, while they are still cheaper.
Since options are just like stocks, they gain more value based on demand. If you wait until the momentum is at peak prices, then you are doing yourself a disservice.
Identifying these dates will help you maximize your gains.
Make sure you take advantage of the dips! Even if they don’t occur on those dates.
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Till then, stay prosperous.
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