Quadruple Witching and How Options Traders can Take Advantage

Tom Gentile

Posted in
Big Picture

By: Tom Gentile
March 10th, 2022

2 mins read

Quadruple Witching will take place Friday, March 18

That day should experience a great deal more options volume due to the options of stock index futures, stock index options, stock options, and single stock futures expiring simultaneously.

This situation causes many Money Managers, Hedge Fund Managers. Market Makers, etc. to not only worry about their current months options positions closing, but they also find themselves rolling out or opening up options on securities of a further out / next month out expiration.

This increase in options volume could lead to an increase in price volatility, but it doesn’t guarantee it.

What is going on is options Implied Volatility (IV) is elevated making options premiums on securities much more expensive.

Options Strategy Consideration

With Quadruple Witching coming up, possibly causing some price volatility coupled with higher than normal IV it is probably best to consider a Selling Strategy like a Put Credit Spread over a Buying Strategy like going Long a Call.

One can use one of my search tools from my online options analysis software ‘Tom’s Tools’ (www.tomsoptiontools.com) called Money Calendar to find a security (stock or ETF) that has a price history of trading higher 9 or 10 of the past ten years.

A bullish pattern history with that success rate is a candidate we would consider Selling to Open a Put Credit Spread on.

We have an opportunity to profit by Selling-to-Open a Put Credit Spread on the XLK, the Technology Select Sector SPDR Fund.

Since option premiums are priced higher than normal, this bodes well for the prospect of earning more money by selling to open a spread.

With a Put Credit Spread we want to position the option strikes where we don’t believe the stock will go or be trading at on expiration. We need the security to be above the sold strike of the spread to realize max profitability on the trade.

Take a look at the Money Calendar data on the Technology Select Sector SPDR Fund, (XLK). My company can teach you how to execute this strategy and we have videos in our library that can help as well.

App: Toms Option Tools

Market Insight articles may show images of lists of stocks meeting a variety of options parameters like Unusual Call and or Put activity or Expensive IV found on my app Toms Option Tools.

Other times I will have other charts may work to amplify my educational points. 

Those options data lists, however, can be found on my app Tom’s Option Tools. Use your device to search up and download this app and get free access to the Morning Reports section of the app.

Other parts of the app are available at a premium subscription rate, but the Morning Reports Lists are yours free.