Recently, I’ve seen many people in the community discussing the concept of quadruple witching day. I’ve found that many investors are still a bit unclear about what it really means. Today, I’ll organize my observations and explain clearly what the US stock market’s quadruple witching day is all about.

Simply put, quadruple witching day refers to the day in the US stock market when four types of derivatives settle at the same time. These four are single-stock futures, single-stock options, stock index futures, and stock index options. It happens four times every year, fixed on the third Friday of March, June, September, and December. It’s called a “witching day” because during the settlement period, futures and spot prices tend to move toward each other, as if some invisible force were tugging at the prices.

This is a very interesting phenomenon. As futures approach settlement, the spread gradually narrows, and especially during the final hour it becomes particularly intense—an industry term for the “quadruple witching hour.” During this period, the market makers’ attempts to control the market become especially apparent. They will drive up oversold stocks and push down overbought stocks, with the goal of moving the settlement prices of the derivatives in the direction most favorable to them.

I’ve looked at historical data, and from 1994 to now, the performance of US quadruple witching days has been quite regular. Taking the S&P 500 as an example, overall, the probability of rising versus falling is almost a 50-50 split, and the average return is slightly negative. But if you break it down by month, you can find some interesting patterns. March has the largest average decline (-0.88%), while September actually has the highest average gain (+0.83%).

Even more noteworthy is the subsequent price action. The day of quadruple witching itself may not be very volatile, but the week afterward is the real key. In particular, after quadruple witching days in March, June, and September, the probability of decline reaches 60-70%, and the average drop is between 1.4% and 1.9%. That’s where the real “curse” lies.

Why does this happen? The reason is actually quite straightforward. Most of the time, market makers forcibly push up spot prices on the settlement day, so that the derivatives settle at higher prices. But these stocks may not have fundamental support to justify rising to that level at all. Once the settlement is done, new buyers can’t keep up, retail investors start taking profits, and prices fall back. According to statistics, 88% of these overbought stocks will decline in the following week.

My advice is: if you’re a long-term investor, you don’t really need to pay too much attention to the volatility around the US quadruple witching day. In the long run, stock prices will still revert to fundamentals, and short-term fluctuations in the order-flow (the positioning and trading dynamics) can’t change much. But if you’re a short-term trader or a trader focused on order-flow, then quadruple witching day becomes very important.

Short-term opportunities do exist. Within the week before and after quadruple witching day, trading volume tends to be especially high, and price swings are particularly fierce. If you believe oversold stocks will rebound, you can consider going long; if you believe overbought stocks will pull back, you can consider shorting. But you must remember: this volatility has nothing to do with fundamentals—it’s purely a game of order-flow. So when trading, follow discipline strictly; never misread the direction and then “double down” into more positions.

At the moment, the US stock market is still being driven by the AI bull trend, so I expect that upcoming quadruple witching days will likely continue to show bullish characteristics. However, you should also watch at all times for signs that the market may be reversing. Additionally, if you’re participating through futures or options, it’s recommended that you roll over your positions ahead of the quadruple witching settlement. Liquidity tends to worsen as the settlement approaches, trading costs also increase, and you may need to incur additional costs when rolling over.

In summary, US quadruple witching day is a market phenomenon with strong regularity. Understanding how it works can help you judge short-term price fluctuations more effectively. But remember, what it affects is only the short-term order-flow dynamics—the logic for long-term investing always returns to fundamentals.