The 20 Worst Stocks During Quadruple Witching Expiration Week

Chipotle Mexican Grill, Inc. (NYSE:CMG), Ctrip.Com International Ltd (ADR) (NASDAQ:CTRP), and Goldcorp Inc. (USA) (NYSE:GG) are among the stocks that historically underperform during quadruple witching expiration week

Dec 12, 2016 at 1:52 PM
facebook X logo linkedin

It's quadruple witching expiration week, with stock and index futures and options simultaneously expiring at Friday's close. While December options expiration week tends to favor the bulls, the risk-reward during quadruple witching expiration weeks is less favorable. And although a number of stocks have historically come out on top, Schaeffer's Senior Quantitative Analyst Rocky White also uncovered a list of names that tend to lag during quadruple witching expiration week. Making the list among stocks that have options, trade at least one million shares per day, and are valued at at least $10 per share are burrito chain Chipotle Mexican Grill, Inc. (NYSE:CMG), online travel agent Ctrip.Com International Ltd (ADR) (NASDAQ:CTRP), and gold stock Goldcorp Inc. (USA) (NYSE:GG).

worst quadruple witching expiration stocks

CMG is up 2.2% at $378.20, after the company said Steve Ells would resume his role as sole CEO -- a position he's shared with Monty Moran since 2009 -- effective immediately. Moran will retire from Chipotle next year, and serve in an advisory role until then. Nevertheless, CMG stock remains down 21.2% year-to-date, and hit a three-year low of $352.96 on Nov. 1. The shares could be due for some historical headwinds, too. Since 2010, CMG stock has been positive just 41% of quadruple witching weeks, averaging a loss of 0.3%.

Should the shares resume their longer-term slide, downgrades could create an even bigger headache for Chipotle Mexican Grill, Inc. Currently, eight of 25 brokerage firms continue to maintain a "buy" or better rating on the embattled stock, leaving the door wide open for a round of bearish brokerage notes -- which could pressure the shares even lower.

True to form, CTRP is trading down 2.4% at $42.40, falling amid a broader decline in Chinese stocks. Quadruple witching expiration week has historically been rough for shares of CTRP, and although the stock has averaged a 0.4% gain since 2010, it's been positive just one-third of the time. More broadly, the security has shed roughly 13% over the past 12 months.

Options traders, meanwhile, have been bracing for more downside. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), CTRP's 10-day put/call volume ratio of 1.53 ranks in the 88th annual percentile -- indicating puts have been bought to open over calls at a faster-than-usual clip. This bearish bias is seen elsewhere, too, with a healthy 8.4% of Ctrip.Com International Ltd's float sold short.

Over the past six years, GG has turned in a positive quadruple-witching-week performance 30% of the time, averaging a loss of 1.6%. While the gold stock was last seen up 0.2% at $13.22 ahead of Wednesday's Fed announcement, it's still lost more than 35% since hitting an annual high at $20.38 in early July. Plus, the shares are now staring up at the $13.60 region -- home to a 38.2% Fibonacci retracement of GG's July highs and January lows.

Short-term options traders are more call-biased than usual toward Goldcorp Inc. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.46 indicates calls more than double puts among options set to expire in three months or less. What's more, this ratio ranks below 77% of all comparable readings taken over the past year. Drilling down, peak open interest for GG is found at the January 2017 15-strike call, with 30,966 contracts currently outstanding.

Let us help you profit from market volatility. Target big gains in short order with a 30-day trial of Schaeffer's Weekly Volatility Trader!

Unlock Weekend Profits with Chris Prybal's Favorite Strategy Up +487.5% in 2024

With the markets going left, right, and sideways, you need to have a plan now more than ever. 

Expert Trader Chris Prybal is no stranger to volatility, and has mastered finding big stock rallies while other traders aren't looking over the weekend. Rallies that produced gains like +207% on RTX calls, +236% on MARA calls, and +238% on NET calls.

A few simple moves on Sunday at 7pm could be the “Secret Sauce” your portfolio needs to not just stay afloat, but make unprecedented gains in this turbulent market.

Don’t sit on the sidelines, beat the market with Chris Prybal's strategy. Join him now!




Rainmaker Ads CGI