| | | | The Overnight Market Anomaly: Why S&P 500 (SPY) Gains Happen While You Sleep
What if I told you that virtually every meaningful gain in SPY happens while you're asleep? I know it sounds crazy, but stick with me here — this discovery completely flipped my trading approach upside down.
I recently uncovered what I consider one of the biggest eye-openers of my trading career. When I put the data side by side, the pattern became impossible to ignore. From 1993 to 2025, the gains in the market happen overnight, not during the day.
Here's what the numbers reveal: during the day, stocks tend to drift flat to slightly lower. That's it. Meanwhile, SPY has consistently gone higher overnight, where we usually see a pop at the market open. The contrast is stunning when you visualize it properly.
The Chart That Changes Everything
The typical movement of SPY during the day shows essentially nothing — just choppiness. From the opening bell to the closing bell, when you combine all those daily sessions, you get flat to slightly negative movement stretching back decades.
But here's where it gets interesting. The movement overnight of SPY, from the markets closed to the markets open, tells a completely different story. This overnight pattern shows a steady upward trajectory that's been remarkably consistent all the way back to 1993.
Flipping the Strategy on Its Head
I had been structuring our 0DTE options in a way that gets paid when the stock opens lower overnight or drifts slightly higher by the afternoon. But that approach was fighting against how markets actually behave. That's not how the markets work at all.
So I did something that felt crazy at the time — I flipped it on its head. I turned these options upside down. Now we get paid big time 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 structuring our options to mirror the exact daily pattern of the stock market instead of working against it. When you align your strategy with how markets actually move — gaining overnight and staying flat during the day — everything changes.
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