Transcript:
Easan Arulanantham:
So in one of your videos you mentioned quadruple witching Friday, which is today, please describe what that is. And why is it important to know about it?
Tom Vaughan:
Yeah. Okay. So quadruple witching Friday is, is the 17th of September. In this particular case, that’s today. And there are four different options contracts that expire today. I’m not an expert at options contracts, I deal with, you know, kind of bread and butter investments, high net worth, you know, situations where I don’t really want to get into the options arena. But I do know this. And because I’ve been watching these types of things for the last 35 years, it creates volatility, people are closing out contracts, buying stocks, selling stocks, usually that volatility is on the negative side, as far as I have seen in the past. Now, here’s the thing that I think is important to understand. If you don’t know all the mechanics of what’s exactly happening and quadruple witching Friday, have to be really careful that you don’t try to analyze, you know, the price movement of what’s going on right now in this environment. Because you’ve got this outside influence that actually is temporary, I would be much more interested to see what happens next week, versus this week or the week before, because of this potential outside influence, which is this quadruple witching Friday. So I think that’s what’s important to understand it causes volatility, it is happening, it is temporary. Be careful of, you know, generating lots of thought process off of what’s happening right now might be better to kind of wait and see what’s going to happen next week or the week after that, before we really can see you know, what’s going to go on here for this timeframe. So it’s an interesting timeframe, there’s no doubt.
Easan Arulanantham:
So you can’t really use today to judge kind of like the macro or like the long term trend. It’s kind of just the event that happens every so often, that affects the market just put people having to do something to fulfill options they have existing.
Tom Vaughan:
Yeah, that’s right. I mean, I’ve made that mistake, where you know, anything goes, you know, because it’s just you look at the normal market sales volume that’s going to create this and this and this. But it’s a temporary situation. So better to kind of hang in there and wait and see what happens after this temporary situation is over. Maybe it causes a catalyst that creates downturn for the next few weeks. Who knows? But it really it clouds the data. So be very careful right now with trying to draw draw conclusions from what’s going on here.