What is Triple Witching in US Financial Market ?
In Simple Terms Imagine a major highway where three large, separate exit ramps all merge into one single lane, and everyone has to exit at exactly 4:00 PM on a Friday. The result would be a massive traffic jam, a lot of frantic maneuvering, and general chaos. Triple Witching is the financial market's version of that traffic jam. It's a specific day when a large number of financial contracts all expire at the same time, leading to a surge in trading volume and often, wild price swings. The Detailed Explanation Triple Witching is the simultaneous expiration of three types of financial derivatives: Stock Index Futures: These are contracts that bet on the future price of a market index (like the S&P 500 or the Dow Jones Industrial Average). Stock Index Options: These give the holder the right , but not the obligation, to buy or sell a market index at a specific price. Stock Options: These are similar to index options but are for individual stocks (like Apple or Tesla). Whe...