Overnight returns make up more than half of total equity returns — a phenomenon known as the overnight drift. Even when the markets are closed, prices move. Understanding this quirk reveals how risk and return are distributed when most traders are asleep.
The weirder part is that a majority of all returns occur at 2-3am ET. There is no linearity in market returns over time of day. They have played us all for fools.
I break this down in my Instagram Reel, covering how the S&P 500 rises when most people aren’t watching. Worth a look if you're into market anomalies!