Every few months, a unique event dubbed ‘quadruple witching’ ripples through global financial markets. While it’s a term born in Wall Street folklore, its impacts can be felt by investors across the globe—including right here in Australia. With financial markets evolving rapidly in 2025, understanding quadruple witching has never been more important for Aussie traders, fund managers, and even everyday ETF holders.
What Is Quadruple Witching—and Why Does It Matter?
Quadruple witching refers to the simultaneous expiry of four types of derivative contracts: stock index futures, stock index options, single stock options, and single stock futures. This happens four times a year—on the third Friday of March, June, September, and December. The result? A surge in trading volumes, liquidity, and, sometimes, wild swings in market prices as traders rush to close, roll over, or settle their expiring positions.
- Stock index futures: Contracts to buy or sell a stock index at a future date.
- Stock index options: Options to buy or sell an index at a set price.
- Single stock options: Options on individual company shares.
- Single stock futures: Futures contracts on individual stocks.
The term ‘witching’ hints at the unpredictable, sometimes chaotic, market movements that can occur during these periods. While quadruple witching is rooted in US markets, globalisation and cross-listings mean Australian shares, ETFs, and super funds can all be affected—directly or indirectly.
Quadruple Witching in the Australian Context (2025)
Although the ASX doesn’t see the same level of quadruple witching action as Wall Street, the interconnectedness of global finance means Aussie investors can’t ignore these dates. Here’s why:
- International Exposure: Many Australian portfolios hold US-listed ETFs or shares, either directly or via superannuation funds. Price volatility during US quadruple witching can spill over into local markets, especially for dual-listed companies and index-tracking funds.
- ASX Derivatives: While Australia’s market has its own options and futures expiry dates (usually on the third Thursday of the month), liquidity patterns and volatility can still be influenced by offshore witching activity—particularly for blue-chip stocks and major indices.
- 2025 Policy Updates: ASIC’s ongoing review of market stability in 2025 has led to tighter circuit breakers and enhanced surveillance on high-volume trading days, including quadruple witching periods. This is aimed at curbing potential flash crashes or manipulation, providing a more level playing field for everyday investors.
Case in point: In March 2025, the ASX 200 saw a 15% spike in trading volumes on the morning following US quadruple witching, as global fund managers rebalanced portfolios and hedged exposures amid heightened volatility.
How Can Investors Navigate Quadruple Witching?
While quadruple witching can look intimidating, it’s not necessarily a time for panic. Here are practical steps for Aussie investors to consider:
- Stay Calm and Hold Long-Term: Short-term volatility often smooths out over weeks. For most superannuation members or ETF holders, quadruple witching is just noise—don’t let it derail your long-term strategy.
- Watch for Price Gaps: Traders should be aware that sharp price swings and gaps can occur, especially at the open and close of trading. Limit orders and stop-losses can help manage risk.
- Keep an Eye on the Calendar: Mark the 2025 quadruple witching dates: March 21, June 20, September 19, and December 19. Expect potential upticks in market activity around these times, especially for globally exposed assets.
- Review Portfolio Exposures: If you hold US-listed options, ETFs, or stocks, check how much of your portfolio is directly exposed to US expiry volatility. Consider rebalancing if you’re uncomfortable with short-term swings.
- Follow ASIC Announcements: ASIC’s enhanced monitoring of market activity on high-volume days in 2025 means any irregularities will be under scrutiny—giving retail investors extra confidence in market integrity.
Quadruple Witching: Opportunity or Risk?
For most Australians, quadruple witching is more of an interesting market phenomenon than a personal threat. However, active traders and those with global exposure can use these dates to their advantage—whether it’s capturing heightened liquidity or hedging short-term risk.
In 2025, with algorithmic trading and global index funds more prevalent than ever, quadruple witching will remain a calendar highlight for market watchers. Staying informed and level-headed is the best way to navigate the ‘witching hour’—and, sometimes, even profit from it.
