Stocks make more money while asleep then awake

[Millionaire]

Holding overnight and over the weekend should produce more profits.

For a start markets are only open RTH 6.5 hours, for 5 days = 32.5 hours, but there are 168 hours in a week.

That means 80% of the time is outside RTH.

Also outside hours are more risky than regular hours, more gap risk, lower liquidity, so you would expect more reward to compensate for the extra risk taken.

 

[DaveV]

Very interesting news here ... Over the study period, all of the S&P 500’s net return was produced between 11:30 p.m. and 3:30 a.m. (Eastern time), during which its average return was 7.6% annualized. On average the rest of the time, the market produced a 0.8% annualized loss ...

In your summary, I think you left out one of the most important statements of the article:

"One confirmation of this explanation comes from the S&P 500’s overnight performance before a holiday in Europe. Many European traders will be less focused on the stock market, and, sure enough, on average the overnight pattern in the S&P 500 does not exist on those days."

European markets are not open 11:30pm USA EST, neither are they open 3:30 am.

3:30AM EST is 09:30AM in Germany. By then, almost all European stock exchanges have already been opened for at least 30 minutes.

 

[noddyboy]

Holding overnight and over the weekend should produce more profits.

For a start markets are only open RTH 6.5 hours, for 5 days = 32.5 hours, but there are 168 hours in a week.

That means 80% of the time is outside RTH.

Also outside hours are more risky than regular hours, more gap risk, lower liquidity, so you would expect more reward to compensate for the extra risk taken.

That sounds like a real explanation. Not blaming it on Europe or Fiji or whatever country that happens to be awake. I bet if they did the same study for Europe, they will say it is due to US traders trading Europe at midnight euro time.

 

[Nobert]

Huh? I just said I don't think it is because it is Europe's traders. That's all

It's alright.
Just thought you might know something im not aware of.

 

[noddyboy]

It's alright.
Just thought you might know something im not aware of.

No I am puzzled too. I just don't think it is possible some trader in Europe drives up all the gains, and Asia and US just stand aside.

I remember during the covid meltdown the overnight returns were really bad, but this article says they are good in the europe subperiod, so that is strange too.

 

[Rickshaw Man]

No I am puzzled too. I just don't think it is possible some trader in Europe drives up all the gains, and Asia and US just stand aside.

I remember during the covid meltdown the overnight returns were really bad, but this article says they are good in the europe subperiod, so that is strange too.

FOMC is active in the stock index futures markets. Soon I expect they will move directly into buying blocks in large cap stocks.....if we start to correct past 10-20%.

 

[Rickshaw Man]

https://www.nytimes.com/2018/02/02/your-money/stock-market-after-hours-trading.html

 

[Rickshaw Man]

https://justinczyszczewski.com/are-most-market-gains-overnight/

 

[noddyboy]

https://justinczyszczewski.com/are-most-market-gains-overnight/


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Except 3/2020 shown as a blip would have ruined a daytrading account.

 

[DiceAreCast]

Why don't you look at the hard cold numbers, dumb nut? You can do that yourself, download daily data from yahoo or wherever, check the US stock returns during the US trading session (log(close/open) or log(close) - log(open) =same) and compare that with the log price change from market close to market open. It's really that simple.

Does anyone really believe that EUROPE is what matters and not Asia or USA?