The phrase «Witch Friday» may bring to mind the name of a promotion in a store before Halloween, but this event has an important meaning in the folklore of traders. Four times a year: on the third Friday of March, June, September and December there is a special «magic» day in the market.
During this period futures contracts and options on stock indices and shares expire simultaneously, which can cause an increase in trading volume and strong volatility. Simultaneous combination of a bunch of critical events at once, from the point of view of the guru of techanalysis, makes market analysis fundamentally impossible. At such moments the most desperate traders resort to non-traditional methods, up to astrology.
On such a day there is an unusual price behavior in the underlying assets, as if they are «under a spell». Also on this day comes «Triple Witching Hour» — so called the last hour of trading on the stock exchange, when something fundamentally unpredictable happens to the price.
This time this special Friday falls not on the last «Friday 13», but on Friday of the current week — September 20. Most stock market traders close their positions in advance before such a Friday.
Of course, you can take this article as a joke. And you could also say it has little to do with crypto. Nevertheless, it’s worth knowing about this special day — as crypto integrates into traditional finance, the impact of anomalies and sudden volatility in the stock market can have an unexpected impact on the outcome of your crypto trading.