According to the New York Times: most gains for $SPY happen overnight. “If you had bought the SPY at close on each business day since 1993 and sold at the open the next day — capturing all of the net after-hour gains — your cumulative gain would be 571 percent.”
![](https://4pq4b9.p3cdn1.secureserver.net/wp-content/uploads/621d0ba389fa8d2a464be417_Screenshot-2022-02-28-at-23.17.12.png)
We thought why not to review this thesis in a bit more detailed way. We set a simple backtest that is not going back to 1993 but to Jan 1, 2010, holds overnight and sells in the morning.
The Setup
- $10,000 to trade daily (nightly actually)
- Trading only $SPY
- Buy at 3:59 using a market order
- Sell at 9:30, 9:31, 9:32, 9:33, 9:34, 9:35 (let’s see which one does better) using a market order
- Do not trade on early close days
![](https://4pq4b9.p3cdn1.secureserver.net/wp-content/uploads/621d0c2cdb8b712c2c963a6f_hnkgjkb0jlg81.png)
The Results
![](https://4pq4b9.p3cdn1.secureserver.net/wp-content/uploads/621d0c850599256b44dc6091_dgxff1z4jlg81.png)
![](https://4pq4b9.p3cdn1.secureserver.net/wp-content/uploads/621d0cb489fa8d3a174bede9_6thwzrj8jlg81.png)
PS: This post is for fun and educational purposes only with no attempt to beat buy and hold. Do not use this as trading/investment advice.