| | | | The Overnight Market Anomaly: Why S&P 500 Gains Happen While You Sleep
What if I told you that virtually all S&P 500 (SPY) gains since 1993 happen overnight, not during the trading day when you're glued to your screen? It sounds unbelievable, but the data doesn't lie.
I recently uncovered one of the biggest eye-openers of my trading career. When you chart the S&P 500's movement from the opening bell to the closing bell, it's basically flat — just choppiness that goes nowhere. But here's where it gets interesting: the movement overnight from market close to market open shows a steady upward trajectory.
The Pattern That Changes Everything
From 1993 to 2025, the gains in the market happen overnight, not during the day. During regular hours, stocks tend to drift flat to slightly lower. Meanwhile, SPY has consistently pushed higher overnight, where we usually see a pop at the market open.
This discovery came after I noticed something wasn't working. I was trading an approach that required the market to behave one way, but it kept doing the exact opposite. I was structuring options to get paid when SPY opens lower overnight or drifts slightly higher by the afternoon. The problem is, that's not how markets behave at all.
Flipping the Script
So I did something that seemed crazy at the time — I flipped the entire approach on its head. Now we get paid if SPY starts off higher at the opening bell — which is common — or even if stocks turn neutral or slightly bearish during the day.
The key insight? We're now structuring our 0DTE options to mirror the exact daily pattern of the market instead of fighting against it. When you align your trades with how markets actually move rather than how you think they should move, everything changes.
This isn't just theory — it's a structural pattern that's been hiding in plain sight for more than three decades. While most traders focus on directional moves during market hours, the real action happens while they're sleeping. | | | | |
|
|
