Options Trading - Page 3 QUADRUPLE WITCHING DAY In the last month of each quarter—on the third Friday of March, June, September, and December — the markets typically experience high trading volume due to the simultaneous expiration of stock options, stock index options, stock index futures, and single stock futures. This day is known as quadruple witching day—up one witch since the introduction of single stock futures. EXERCISE AND ASSIGNMENT Every option that expires in a given month usually expires on the Saturday after the third Friday of the month. That means the last day to trade expiring equity options is the third Friday of the month. If you plan on exercising your options, be sure to check with your brokerage firm about its cut-off times. Firms may establish early deadlines to allow themselves enough time to process exercise orders. When you notify your brokerage firm that you'd like to exercise your option: Your brokerage firm ensures the exercise notice is sent to The Options Clearing Corporation (OCC), the official guarantor of all listed options contracts. OCC assigns fulfillment of your contract to one of its member firms that has a writer of the series of option you hold. If the brokerage firm has more than one eligible writer, the firm allocates the assignment using an exchange-approved method. The writer who is assigned must deliver or receive shares of the underlying instrument — or cash, if it is a cash — settled option. << Back     I     Next >>

Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

Disclaimer: This information is provided with the understanding that the authors and publishers are not engaged in rendering financial, accounting or legal advice, and they assume no legal responsibility for the completeness or accuracy of the contents. Some charts and graphs have been edited for illustrative purposes. The text is based on information available at time of publication. Readers should consult a financial professional about their own situation before acting on any information.