1. Your Questions About Stock Market Holidays
Richard asks…
Is there time decay on options over the weekend and on holidays
when the stock market is closed?
Steve Winston answers:
I would have to say yes there is time decay, but how much would depend on the length of time
till expiration and how close the market price is to the strike price. The greek letter that
represents the amount a option decays per day, theoretically, is Theta. It is usually expressed in
a negative number representing the decrease in price per day. This number will usually increase
the last 30 days. Don't forget that only the extrinsic value will depreciate before expiration; the
intrinsic value will remain until expiration, exercitation, or assignment.
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2. Mandy asks…
when black friday comes, and the holidays come, does the stock
market go up to sales?
im doing an economics assignment for school and I want to know two things:
which parts of the economy are not harmed when the economy goes down (which people can
make money if the economy is down)
Steve Winston answers:
Black Friday has little to do with the overall stock market performance. Instead of looking at
black friday, I would look at Retail Sales numbers. Retail Sales in the last two months of the
year have potential to move the markets (up or down)
Retail sales are sometimes a direct indication of consumer confidence.
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3. Nancy asks…
Veterans Day was a stock market holiday until 1953. Why not now,
during 2 wars?
The stock market takes holidays on New Years Day, Martin Luther King Day, Presidents Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day. It closes early on the day after Thanksgiving and on Christmas eve. I don't understand why
these holidays are recognized, but not Veterans Day. Obviously, since it closes on MLK day
and Pres Day, etc., the fact that the market is international is not really a concern. Also, after
looking it up, I found out that Vets Day WAS a stock market holiday from 1934-1953. And then,
from 1954 - 2006, a 2 min closure was taken on the day to recognize veterans. But, for some
reason, in 2007 and on, even this was not done. While I am all about people having jobs and
working, and have no problem with businesses etc. being open on any holiday they choose to, I
think that the stock market does a disservice to veterans by not being closed on this holiday. In
the past, the market has closed for Election Day and Columbus Day, too. I'd like to know who
the governing body is that makes this decision and why Veterans Day does not rate as high as
President's Day, MLK Day, Labor Day, Memorial Day, etc.?
Steve Winston answers:
Money= greed
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