Options Trading Witching Dates And Options On Futures

Options trading is one of the best ways to profit from the volatility in the underlying stocks. The more the stock price swings, the more profitable an options contract can be. With options, you can build a much larger stock portfolio as compared to the direct investing in those stocks.

Options get effected by volatility in the market as well as the time. You need to know certain dates that are very important if you are seriously into stock options. These dates are known as the Witching Dates. Now many people trade stocks. For them stock options should not be new. They can invest in stock options. However,stock options are a bit tricky.

All stock options contracts expire on the third Friday of each month. Options on futures expire on different dates depending on the contract. Sometimes, different classes of options expire on the same date. These dates are known as the Double, Triple and Quadruple Witching Dates.

Double Witching Days are those when any two of the different classes of options contracts like the stock options, stock index options or the stock index futures options expire. Triple Witching Days is when these three classes expire on the same date. This date is the third Friday in the last month of each quarter. Quadruple Witching Days are those when these three classes of options contracts expire along with the individual stock futures options.

Triple Witching Days is when these three classes expire on the same date. This date is the third Friday in the last month of each quarter. Quadruple Witching Days are those when these three classes of options contracts expire along with the individual stock futures options. Double Witching Days are those when any two of the different classes of options contracts like the stock options, stock index options or the stock index futures options expire.

Now when you trade a stock index futures options contract, you need to first master trading that stock index futures contract. Now stock options and stock index futures options are different contracts. You need to understand the difference between them.

So when you trade options you need to understand these options witching dates as they can affect your portfolio returns. Knowing these dates helps you to trade or not trade on that date keeping in view the options contract that you are trading.

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