The Powerful Impact of ‘Triple Witching’

Due to imbalances that could happen when these trades are placed, arbitrageurs could look to profit from the resulting price inefficiencies. Options traders also find out if their options expire in or out of the money. On such days, traders with large positions in these contracts may be financially incentivized to try to temporarily push the underlying market in a certain direction to affect the value of their contracts. The expiration forces traders to act by a certain day, causing trading volume in…