“The Witch” is here……

In the stock market there is a thing called “Triple Witching” it only happens once every 3 months, so quarterly, and it can be “Wicked” What T.W. is is it’s the simultaneous expiration of stock options, stock futures and stock index contracts. That is the “Trifecta” of expirations their traders.. With it can come EXTREME volatility. Meaning prices can adjust in a undue manner. Today we are seeing that. The highest volume on T.W. days often occurs towards end of day, so we are just getting started here.

In a nutshell what is going on is a lot of contracts expiring all at once and everyone is trying to get their piece of the pie. Everyone except common share holders. They don’t have the options that option traders do with adjustments. As an Options trader I can sell short term premium against my long positions thus allowing me to earn weekly income even if NVDA pulls back. Or any other stock or ETF for that manner. ( I often employ that strategy with the SPY to generate weekly income ) What common share holders can and should do however is always manage their positions diligently. Trade Management never goes out of style.

Setting stops and taking profits when one can and not losses when one has to is an important part of survival in the markets. My “crystal ball” is still in the shop so where the market goes from here on Monday is any bodies guess. NVDA is in smackdown mode the past 2 days. While options buyers have been buying it up it is for longer out dates. They buy for pennies on the dollar compared to stock holders. NVDA is down over 4% at the time of this writing and it broke south of it’s long term up channel. It also broke it’s first level of major support. There are 4 more support areas on the chart.

Allowing winning positions to turn into losing trades is more than just bad Trade Management , it’s an Ego out of control. And no one ever paid their bills with that.

Invest wisely, live charitably and be well

Brother Bill