Since 1993 the market has made almost all its money overnight.
Split the return into two buckets, the hours it’s open and the hours it’s closed, and almost everything lands in the closed bucket.
Buy the S&P 500 at the close and sell at the next open, and the raw price return beats buy and hold. Do the opposite, open to close, and you get almost nothing.
And that’s 30 years of stats right there.
Nobody has a clean answer for why it keeps happening.
There’s one explanation that holds up better than the rest, and once you understand it you’ll see why this window is the only place left where a small trader has any structural advantage at all.
Why it persists
First, a warning. Nobody actually ran that trade.
8,000 round trips gets eaten alive by spreads, commissions and short-term taxes, and the researchers who costed it out say most of the edge disappears once you pay for it.
So this is a fact about when the market pays, not a strategy you can go execute in shares.
Here’s the explanation that makes sense to me.
The money that flattens every other edge in this market can’t hold overnight cheaply.
Bigger margin requirements, lending fees they have to eat, and gap risk nobody wants to carry. So the capital that would normally arbitrage this thing away is sitting on its hands during exactly the window where the return shows up.
That constraint hasn’t changed in 30 years, and it isn’t going to.
Which brings me to why options matter here.
A drift too small to survive costs in shares is a completely different animal with leverage on a same-day expiration.
That’s what Licia’s been doing twice a week. Buy during the session, sell into the next open.
She’s going live tonight and I want you on it.
She’s showing what she’s spent the last 90 days building, which is a scanner that finds 3X more of them.
Sign up now and she sends you three reports before the event even starts.
They’re on technical charting, you can use them whether you ever touch a zero-day or not, and they normally run $99.
That part hits your inbox the second you register. The event’s at 7PM ET.
Save my seat and send my reports
Your only option,
Mark Sebastian