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Traders work on the floor of the New York Stock Exchange, November 16, 2010.Brendan McDermid/Reuters

One of the most profitable trades since 1993 is broken amid the coronavirus pandemic, Business Insider - Business Insider Singapore

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One of the most profitable trades since 1993 is broken amid the coronavirus pandemic.

Data from Bespoke Investment Group shows that if a trader bought the S&P 500 ETF SPY at 4:00 p.m. on the close and sold it the next day at 9:30 a.m. on the open, every single day since 1993, they would be up 570%.

On the flip side, if a trader bought the SPY at 9:30 a.m. on the open and sold it later that day at 4:00 p.m. on the close, every single day since 1993, they would be up a meager 3%.

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Bespoke Investment Group

For nearly three decades, 99% of the gains in the stock market have occurred outside of the market’s regular 9:30 a.m. to 4:00 p.m. trading hours.

But now, amid the coronavirus pandemic, this trade has reversed.

Over the first 100 trading days of 2020, a trader that bought the close and sold the open would be down 19.7%.

A trader that bought the open and sold the close would be up 16.9%.

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Bespoke Investment Group

The spread in performance between these two trading strategies is historic.

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“There has never been a 100-trading day period like this where the intraday action has been more positive than the after-hours action to this degree,” Bespoke said.

Since the March 23 lows, intraday trading sessions have remained bullish, while after-hour trading sessions are turning more bullish.

While the most profitable trade since 1993 has been broken year-to-date in 2020, there are signs that it has some life and may return.

Month-to-date, the S&P 500 has gained 147 points total in after-hours sessions, while it has lost 24 points during its regular trading hours, according to historical data from Yahoo Finance.