Wednesday, June 01, 2005

Buy at close, Sell at Open

Thinking Of Selling Everything Before The Close? Don't Pull The Trigger Yet!
If one had bought the SPYs on the close over the past 12 years and sold them on the next day's open, they would have made 143 SPY points (plus, they would have also received all the quarterly dividends). And had one bought the SPYs on the open each day and sold the position on the close, how would they have done? They would have lost money! How much? A little more than 67 points. Yes, in spite of a solid upward move in SPY prices, the intraday move--on a net basis--was negative!