The real shark week is back for traders. Often during the trading week leading up to the monthly options expiration there tends to be lots of volatility. On March 15, for example, we're looking at at quadruple witching options expiration. That's when options expire for stock index futures, stock options, stock index options and single stock futures.
Volatile And Abnormal
This particular period is notorious for rumors, stocks and commodity upgrades/downgrades and, quite often, volatile and abnormal stock and commodity activity. Every month the major financial institutions try to figure out where the weak money bets have been placed in the options market. Those market-moving institutions then bet against that group of weak hands taking the market in the opposite direction. In other words, if the institutions can figure out where the majority of small retail option traders are betting on the near-term contract, they will usually cause that options contract to trade out of the money or worthless by Friday.
A quick tip: don't trade the near-term contract that is about to expire.
A few stocks that tend toward volatility during options expiration week include Apple Inc. (AAPL), Green Mountain Coffee Roasters Inc. (GMCR), First Solar, Inc. (FSLR), Netflix Inc. (NFLX) and (CSTR) Coinstar Inc. These stocks are notoriously susceptible to unusual market activity due to rumors, unusual upgrades and downgrades and erratic volatility throughout the trading week. 
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Beware The Options Witching Hour
Published 03/11/2013, 05:03 PM
Updated 07/09/2023, 06:31 AM
Beware The Options Witching Hour
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Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
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