Why These Stocks Skyrocketed On Friday's Quad Witch

On Monday’s PreMarket Prep, host Dennis Dick talked about a handful of stocks that registered large run-ups in share price on Friday’s quadruple-witching expiration day. Quadruple witching expiration days are days on which stock index futures, stock index options, stock options and single stock futures all expire on the same day.

“There were some fireworks in some individual stocks,” Dennis said. Medgenics Inc GNMX was one of the biggest movers.

“GNMX gapped up from $6 to $17.75 on the closing print.” Dennis explained that the reason why the trade doesn’t show up in the charts is because it was cancelled after it went through.

“NASDAQ is an automated close, which pools in the buyers and sellers. There [weren't] enough sellers, so it went all the way up to $17.75 to find the sellers!”

Medgenics wasn’t the only stock on the move into the close. NVIDIA Corporation NVDA ran up from $98 to $100.40, Ross Stores, Inc. ROST jumped from $67.5 to $69.50 and Marriott International Inc MAR climbed from $84.50 to above $86.

Dick explained the big moves in these stocks.

“Quad witch is what gives you some crazy closing imbalances, and sometimes there’s just not the offsetting orders so they have to find liquidity,” he said.

“If you’re day-trading stocks, you want to be aware of what these stocks did on Friday.”

He urged traders to take a look at their stocks prior to the Monday open after a quadruple witching Friday because there is often some atypical trading behavior on the next week's open.

Listen to the full discussion in the clip below.

PreMarket Prep is a daily trading ideas show that focuses on technical analysis and actionable short term trades. You can listen to the show live every morning from 8–9 ET here, or catch the podcast here.