June 14, 2011
- in Uncategorized by schooloftrade
Quadruple Witching & Options Expiration (OPEX)
Quadruple Witching:
When 4 different asset classes expire. Stock Index Futures, Stock Index Options, Stock options, Single stock futures
OPEX = When options on FUTURES expire, 3rd Friday of every month, unless the first day of the month is a Friday.
My professional traders will watch, and trade very selectively during Quadruple Witching, and don’t really worry THAT much about OPEX.
Quadruple witching lines up with the end/beginning of a new quarter. These are times when major money managers are opening their funds, making new decisions for the company.
Most professional traders will either take a vacation this week, do work around the office this week, and stay very selective with the trades they take.
How do we trade this week?
Monday is expected to be slow as traders sluggishly enter the pit and start worrying about OPEX.
Monday and Tuesday are usually fine, little slow on Monday but no big worries.
Wednesday = Wacky Wednesday
If you’re getting ready for options expiring on Saturday morning, you need to have everything by Friday at the close.
When will you start re-balancing your portfolio? Wednesday and Thursday Morning.
We call it ‘wacky’ Wednesday because the price action is wacky.
Large blocks of buyers and sellers without any apparent reason.
Thursday is not nearly as bad as Wednesday, and Friday is usually a walk in the park.
Wave Pattern
Learn our 3 price patterns on the blog
Why use the 144tick / 4range for entry?
– Faster timeframes allow more precise entries using the BIGGER PICTURE from the slower timeframes.
