Triple-Witching Weekend

The weekend has been volatile & full with adrenaline pumping moments. For England that is. I call this post Triple Witching Weekend due to the 3 most important events for England this year. Not to mention it taking the name of the Triple-witching Day of the investment world.

Definition: "Triple-witching" day is the third Friday of the month that ends each quarter. It marks the simultaneous expiration, at the close, of stock options, index options and index futures."

Implications: The impact of "triple witching" has been associated with increases in the volatility of the market. The increased volatility increases the uncertainty about prices of the underlying stocks.

Stock options that are exercised, or the underlying stock bought/sold, creates large additional volume. With unwinding large volumes of stocks, there is an increase in index arbitrage (i.e., the simultaneous purchase of index futures and the sale of a basket of stocks, or vice versa, when the values of the index and the underlying stocks become "out of wack" with each other). Meanwhile, some investors are trying to unscramble whether to, say, buy/sell a position, in options or futures contracts, similar to their current ones (i.e., roll-over the existing contracts) or get into different ones.
(from http://www.morevalue.com/glossary)

Now back to the 3 events.
1. Football: England lost to Russia, 1 - 2
Implication: May result in England not qualifying for Euro 2008
2. Rugby World Cup: England lost the final to South Africa, 6 - 15
Implication: Did not retain the world cup won in 2003
3. F1: Lewis Hamilton finished 7th in Interlagos
Implication: World Championship went to Kimi (110 pts), 2nd Hamilton (109), 3rd Alonso (109)

I now wait for England jerseys to go on sale.