The article discusses the phenomenon of triple witching expiration, which is the quarterly expiration of single stock and index options, and index futures. Here are 3 highlights from the article:
1. Triple witching expiration is a highly active trading session that occurs quarterly and is taking place at a unique moment when the S&P 500 is at a historic high.
2. The week after the September triple witch has historically been weak for the market, with losses averaging around 1% for the Dow Industrials, S&P 500, and Nasdaq since 1990.
3. The S&P 500 will undergo rebalancing with three new entrants replacing existing companies, leading to the “S&P inclusion effect” where a stock’s inclusion in the index typically results in a price increase.
In summary, the article delves into the significance of the triple witching expiration, the historical trends following this event, and the impact of S&P 500 rebalancing on stock prices.
Editorial content by Sierra Knightley
