Triple witching hour in stock trading is the last hour of trading on the third Friday of the last month of each quarter that is March, June, September and December. Why this hour is known as the triple witching hour in the New York Stock Exchange?

What's the mystery behind this hour? If you know something about futures trading than you will also know this fact that futures contracts expire on the third Friday of the last month of each quarter that is March, June, September and December. The expiry of these contracts force the index arbitraguers to close their positions by buying or selling their stock positions and the futures contracts.

Similarly index options and options contracts on individual stocks expire on the third Friday of each month. The third Friday of each month is therefore known as the Double Witching Hour. On the third Friday of March, June, September and December both the futures contracts as well as the options contracts expire simultaneously. Hence the name Triple Witching Hour.

Most investors only trade stocks and are highly successful at stock trading without ever trying to trade index futures or other futures contracts. It is not necessary that you trade futures. However, you should know that now the futures market and the stock market are intimately interconnected and most of the short term volatility in stock prices is caused by futures trading.

This understanding can help you understand various strange and mysterious things that start happening in the stock market like the triple witching and the double witching. How program traders can make the stock market volatile for a short time when they start dumping millions of stocks on the floor of the stock exchange just making a few clicks on their trading software.

As a trader, you can try trading index futures. Many people successfully day trade index futures. The most popular is the E-Mini S&P Futures. You can make a start by paper trading these index futures for a few weeks!