{"id":218955,"date":"2021-04-04T23:20:00","date_gmt":"2021-04-04T20:20:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/opinion-how-to-make-money-from-stocks-while-you-sleep\/"},"modified":"2021-04-04T23:20:00","modified_gmt":"2021-04-04T20:20:00","slug":"opinion-how-to-make-money-from-stocks-while-you-sleep","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/opinion-how-to-make-money-from-stocks-while-you-sleep\/","title":{"rendered":"#\n  Opinion: How to make money from stocks \u2014 while you sleep"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3df9c897af8\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3df9c897af8\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/opinion-how-to-make-money-from-stocks-while-you-sleep\/#Much_of_the_S_P_500s_gains_are_made_while_US_markets_are_closed\" >Much of the S&amp;P 500\u2019s gains are made while U.S. markets are closed<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/opinion-how-to-make-money-from-stocks-while-you-sleep\/#Mark_Hulbert\" >Mark Hulbert<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#<br \/>\n  Opinion: How to make money from stocks \u2014 while you sleep<br \/>\n<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"Much_of_the_S_P_500s_gains_are_made_while_US_markets_are_closed\"><\/span>\n  Much of the S&amp;P 500\u2019s gains are made while U.S. markets are closed<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000219862\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       The early bird doesn\u2019t just get the worm. It also gets the bulk of the stock market\u2019s profits.<\/p>\n<p> That\u2019s because most of the S&amp;P 500\u2019s<br \/>\n        SPX,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210599714\/realtime\" class=\"positive\">+1.18%<\/bg-quote><br \/>\n        gains occur overnight. The U.S. benchmark index on average barely gains while the New York Stock Exchange is open.<\/p>\n<p>That\u2019s the finding of a recently updated study entitled \u201c<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ssrn.com\/abstract=3596245\" class=\"icon none\">Market Return Around the Clock: A Puzzle<\/a>.\u201d Its authors are Oleg Bondarenko of the University of Illinois at Chicago and Dmitriy Muravyev of Michigan State University.<\/p>\n<div class=\"paywall\">\n       The professors analyzed tick-by-tick trade data for S&amp;P 500 E-mini futures between 2004 and 2018. Crucially, their data reflected trades outside the normal trading hours in which the NYSE is open. They therefore were able to measure the proportion of the stock market\u2019s return since 2004 that was produced while the NYSE was closed.<\/p>\n<p>The chart below illustrates what they found: Over the study period, all of the S&amp;P 500\u2019s 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.<\/p>\n<div data-layout=\"inline\n                \" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetMediaIllustration\n            inline\n  article__inset\n          article__inset--type-InsetMediaIllustration\n            article__inset--inline\n  \"><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        renoImageFormat-\n        img-inline\n        article__inset__image\n      \" itemscope itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<div style=\"padding-bottom:67.34375%;\" data-mobile-ratio=\"67.34375%\" data-layout-ratio=\"67.34375%\" data-subtype=\"\" class=\"image-container  responsive-media article__inset__image__image\">\n        <img decoding=\"async\" srcset=\"https:\/\/images.mktw.net\/im-320158?width=140&amp;size=1.4849187935034802 140w,\nhttps:\/\/images.mktw.net\/im-320158?width=540&amp;size=1.4849187935034802 540w,\nhttps:\/\/images.mktw.net\/im-320158?width=620&amp;size=1.4849187935034802 620w,\nhttps:\/\/images.mktw.net\/im-320158?width=700&amp;size=1.4849187935034802 700w,\nhttps:\/\/images.mktw.net\/im-320158?width=860&amp;size=1.4849187935034802 860w,\nhttps:\/\/images.mktw.net\/im-320158?width=1260&amp;size=1.4849187935034802 1260w\" sizes=\"(max-width: 140px) 100px,\n(max-width: 540px) 500px,\n(max-width: 620px) 580px,\n(max-width: 700px) 660px,\n(max-width: 860px) 820px,\n1260px\" src=\"https:\/\/images.mktw.net\/im-320158?width=620&amp;size=1.4849187935034802\" data-enlarge=\"https:\/\/images.mktw.net\/im-320158?width=1260&amp;size=1.4849187935034802\" alt=\"\" title=\"\"><\/div><figcaption class=\"wsj-article-caption article__inset__image__caption\" itemprop=\"caption\"><\/figcaption><\/figure>\n<\/div>\n<p>       This overall result is based on a 14-year average, and \u2014 needless to say \u2014 the pattern did not hold up in each and every trading session. Still, Muravyev told me in an interview, the pattern has been remarkably consistent. One indication of this consistency: even if you remove the 10 of these 14 years in which the pattern was the strongest, the pattern still remains statistically significant in the remaining four.<\/p>\n<p>Last year posed a real world test for this market pattern, and that\u2019s what the professors analyzed in their recently completed update of their original study. Not only did they find that the pattern held up in 2020, it actually was a lot stronger than the 2004-2018 average.<\/p>\n<p><strong>Why should this overnight pattern exist?<\/strong><\/p>\n<p>Muravyev said he believes that the primary cause of this night-versus-day pattern traces to the stock market\u2019s reaction to uncertainty. He and his co-author obtained tick-by-tick histories for CBOE Volatility Index<br \/>\n        VIX,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210598281\/delayed\" class=\"negative\">-10.67%<\/bg-quote><br \/>\n       futures (VIX), and found that they and the E-mini S&amp;P futures are inversely correlated. That is, the VIX on average tends to fall significantly beginning at around 11:30 p.m. Eastern time, right around when the S&amp;P 500 futures start rising.<\/p>\n<p>This inverse relationship between the stock market and the VIX makes theoretical sense, of course. Investors react negatively to increases in uncertainty, just as they tend to react positively when volatility falls.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>But why should uncertainty fall around 11:30 p.m.? Muravyev said that\u2019s when European investors begin to make trades in their portfolios, and their collective actions help to reduce the uncertainty that has built up since the NYSE closed the previous trading day.<\/p>\n<p>To be sure, he added, at all hours of the clock there will be some investors who are just waking up, looking at their terminals, and adjusting their portfolios. But a critical mass of investors is required to ease uncertainty, and it <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ears as though Europe is the only non-U.S. region around the world which provides that critical mass.<\/p>\n<p>One confirmation of this explanation comes from the S&amp;P 500\u2019s 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&amp;P 500 does not exist on those days.<\/p>\n<p><strong>Investment implications<\/strong><\/p>\n<p>The most obvious investment implication of this research is for traders to buy S&amp;P 500 E-mini futures at 11:30 p.m. Eastern and sell at 3:30 a.m. \u201cDespite trading twice a day,\u201d the professors report, this trading strategy \u201cremains profitable net of conservative estimates of trading costs \u2014 exchange fees, commissions, and the bid-ask spread. Its after-cost Sharpe ratio exceeds that of the buy-and-hold alternative.\u201d<\/p>\n<p>Futures trading is not for amateurs and can be especially risky for those unfamiliar with it. So even if you were otherwise tempted by this strategy, a good idea would be to first consult with a qualified financial professional. You also should trade on paper for at least a month or two before risking any of your money.<\/p>\n<p>Finally, know that this overnight pattern manifests itself on average over many trading sessions. So either be prepared to follow this trading strategy with consistency and discipline over a long period or don\u2019t bother.<\/p>\n<p>Given these qualifications, you may decide that getting a good night\u2019s sleep is worth more than profits from overnight trading. Still, this research shows why you shouldn\u2019t be surprised the next time you see the S&amp;P 500 perform so much better overnight than during the day.<\/p>\n<p><em>Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a>letters that pay a flat fee to be audited. He can be reached at <\/em><em>mark@hulbertratings.com<\/em><\/p>\n<p><strong>More:<\/strong> What history tells us about the future performance of international stocks<\/p>\n<p><strong>Plus: <\/strong>Stock investors can only hope the post-COVID 2020s aren\u2019t like the \u2018Roaring \u201920s\u2019<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Mark Hulbert\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Mark_Hulbert\"><\/span>Mark Hulbert<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B21005575-02D4-D4B5-4572-D35AD6507D5F%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Opinion: How to make money from stocks \u2014 while you sleep &#8221; Much of the S&amp;P 500\u2019s gains are made while U.S. markets are closed The early bird doesn\u2019t just get the worm. It also gets the bulk of the stock market\u2019s profits. That\u2019s because most of the S&amp;P 500\u2019s SPX, +1.18% gains occur&#8230;<\/p>\n","protected":false},"author":1,"featured_media":218956,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-218955","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/218955","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=218955"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/218955\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/218956"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=218955"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=218955"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=218955"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}