The term "witching hour" in stocks refers to a specific time period on certain Fridays when financial derivatives, such as stock options and index futures, expire simultaneously. This convergence of expirations typically occurs during the last hour of trading before the market closes, creating a flurry of trading activity and often increased volatility.

There are four main witching hours throughout the year, which align with the expiration of various types of derivatives contracts: the third Friday of March, June, September, and December. During these periods, traders and investors may witness heightened trading volumes as market participants rush to adjust or close out their positions in these derivative contracts.

The term "witching hour" is somewhat of a misnomer, as it might imply a negative or ominous connotation. While it's true that increased trading activity during this time can lead to heightened price volatility, the term itself stems from an earlier era of superstition rather than an accurate reflection of market dynamics.

For traders and investors, the witching hour can present both opportunities and risks. The increased volatility can lead to swift price movements, providing potential for profits, but it can also amplify losses if not managed properly. Due to the unique characteristics of this period, traders often exercise caution and implement appropriate risk management strategies to navigate the potential challenges and uncertainties associated with the witching hour.

The witching hour in stocks refers to the specific time when stock options and index futures contracts expire simultaneously on certain Fridays throughout the year. This phenomenon can lead to increased trading activity and volatility, offering both opportunities and risks for market participants.