Financial markets around the world are experiencing their ‘witch’s day’ this Friday, a phenomenon that is repeated four times a year and that can generate volatility due to the large volume of operations and the tension with which it is accompanied.
Every third Friday in March, June, September and December contracts expire simultaneously quarterly on four major instruments: Index Futures, Index Options, Stock Options and Stock Futures. On this day also takes place the ‘quadruple hour witch‘, as the last hour of negotiations on the Stock Exchange with the four instruments mentioned is called.
During the ‘witch friday‘the market volume increases considerably and, with it, volatility. This variability is usually much more evident just an hour before the close of the markets, so investors who have an open position in such futures and options contracts have to decide what to do. They can wait for their expiration and execute the contract or they can choose to close the trade and re-execute another with a later expiration.
Some experts cited by RBC warn that the losses at the end of this day may be “significant”, because it has coincided with various negative factors such as the delta variant of covid-19 that is having an inhibiting effect on the world economy or the US public debt, which has reached its ceiling.
Igor Dodonov, an analyst at Russian investment firm Finam, urges investors to be cautious, since it is “very possible” that some ” sudden movements and unexpected in certain assets “.
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