The Overnight Drift Higher In Index Futures

Discussion in 'Index Futures' started by Roman Candle, May 7, 2009.

  1. Just about all the gains in stock index futures occur overnight, it's pretty simple folks.
     
    #321     Nov 14, 2022
  2. Oh look the stock index futures are rising already.

    Screenshot 2022-11-14 202640.jpg
     
    #322     Nov 14, 2022
  3. Ah yes, nothing like making money while you sleep

    Screenshot 2022-11-14 202640.jpg
     
    #323     Nov 15, 2022
  4. Index futures do not rise every night.

    Screenshot 2022-11-17 081456.jpg
     
    #324     Nov 17, 2022
  5. 4 out of 5 days ain't bad.

    Screenshot 2022-11-18 062652.jpg
     
    #325     Nov 18, 2022
  6. Overnight

    Overnight

    You posted 3 out of 5, not 4 out of 5. What was the net out of the 5?
     
    #326     Nov 19, 2022
  7. TrAndy2022

    TrAndy2022

    A study about the "The Overnight Drift" here.

    https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr917.pdf

    Abstract
    This paper documents that U.S. equity returns are large and positive during the opening hours of European markets. These returns are pervasive, economically large, and highly statistically significant. Consistent with models of inventory risk, we demonstrate a strong relationship with order imbalances at the close of the preceding U.S. trading day. Rationalizing unconditionally positive “overnight drift” returns, we uncover an asymmetric reaction to demand shocks: market selloffs generate robust positive overnight reversals, while reversals following market rallies are much more modest. We argue that demand shock asymmetry can arise in inventory management models with time-varying dealer risk bearing capacity.
     
    #327     Nov 21, 2022
  8. Oh look the stock index futures are rising overnight.

    Screenshot 2022-11-21 195009.jpg
     
    #328     Nov 21, 2022
  9. There are only so many futures contracts. Order imbalances are not as likely as in equities. Equities do not trade 24 hours a day on US exchanges, therefore I don't think the overnight drift higher is due to order imbalances of stock index futures.
     
    #329     Nov 21, 2022
  10. Oh look the stock index futures are up overnight,,,,SHOCKER!

    Screenshot 2022-11-22 073115.jpg
     
    #330     Nov 22, 2022