Stock market holidays | Robinhood (2024)

FAQs

Do stocks go up or down after holidays? ›

It's been noted that there's a positive expectancy for buying stocks one to two days before a long weekend/holidays and then selling one to two days after. Trading volume tends to be lower heading into long weekends which may help explain prices drifting up (there's a long-term upward bias to the stock market).

Your account will be flagged for pattern day trading if you make 4 or more day trades within 5 trading days, and the number of day trades represents more than 6% of your total trades in that same 5 trading day period. This rule only applies to margin accounts and IRA limited margin accounts.

If your financial status isn't strong enough, you may be assessed as too high of a risk for making losses. That means the app will wait until you have made several trades before approving you for option trading.

Some traders follow something called the "10 a.m. rule." The stock market opens for trading at 9:30 a.m., and the time between 9:30 a.m. and 10 a.m. often has significant trading volume. Traders that follow the 10 a.m. rule think a stock's price trajectory is relatively set for the day by the end of that half-hour.

In the world of investing, the “holiday effect,” as it is often referred to, is a phenomenon where stock prices see an increase right before a major holiday. There are many theories on why this may occur.

The 3-Day Rule in stock trading refers to the settlement rule that requires the finalization of a transaction within three business days after the trade date. This rule impacts how payments and orders are processed, requiring traders to have funds or credit in their accounts to cover purchases by the settlement date.

Why Do You Need 25k To Day Trade? The $25k requirement for day trading is a rule set by FINRA. It's designed to protect investors from the risks of day trading. By requiring a minimum equity of $25k, FINRA ensures that investors have enough capital to absorb potential losses.

If you buy your option for less than your original selling price, you'll profit. If you buy it for more than your selling price, you'll realize a loss. And if you buy it at the same price as your selling price, you'll break even.

Do you get instant buying power on Robinhood? ›

With Instant Deposits, you may get up to $1,000 instantly after you initiate a bank deposit into your Robinhood account. Although you may have access to these funds right away, the transfer from your bank into your Robinhood account may take up to 5 business days.

As a retail investor, you can't buy and sell the same stock more than four times within a five-business-day period. Anyone who exceeds this violates the pattern day trader rule, which is reserved for individuals who are classified by their brokers are day traders and can be restricted from conducting any trades.

Getting unlimited day trades on Robinhood typically requires meeting the minimum account balance of $25,000 or upgrading to Robinhood Gold. Alternatively, opening a cash account or exploring swing trading strategies can also provide more flexibility in executing day trades.

Trades with non-marginable securities are subject to cash account rules, not margin account rules, meaning you can day trade in your margin account without fear of being flagged as a pattern day trader.

The January Effect

In January, stocks typically see a surge in activity. This phenomenon is known as the 'January Effect', which has been attributed to end-of-year bonuses, New Year optimism, and tax harvesting driving up demand for stocks after year's end sell-offs.

What happens to the stock market during the holidays? Things start shifting early. There's a common phenomenon known as the “holiday effect” or the “pre-holiday effect” that signals a slight uptick in stock prices on the day before a holiday.

The term, “Santa Claus rally” was first used by Yale Hirsch in 1972 to describe the phenomenon that happens to the stock market just after Christmas. As the name implies, the market tends to rally as we approach the holidays, meaning it improves and prices steadily increase at the end of the year.

The general strategy is to purchase equities one or two days prior to a holiday. Short-term traders would look to sell just after the holiday while longer-term investors would wait until year end. Both strategies have proven to be profitable plays.