Best Times of Day to Buy or Sell Stocks

First thing in the morning, market volumes and prices can go wild. The opening hours are when the market factors in all of the events and news releases since the previous closing bell, which contributes to price volatility. A skilled trader may be able to recognize the appropriate patterns and make a quick profit, but a less skilled trader could suffer serious losses as a result. So if you’re a novice, you may want to avoid trading during these volatile hours, or at least within the first hour.

However, for seasoned day traders, the first 15 minutes following the opening bell is prime time, usually offering some of the biggest trades of the day on the initial trends.
The opening is 9:30 a.m. to 10:30 a.m. Eastern Time (ET) period is often one of the best hours of the day for day trading, offering the biggest moves in the shortest amount of time. A lot of professional day traders stop trading around 11:30 a.m. because that is when volatility and volume tend to taper off.

Best Day of the Week to Buy Stocks

People believe that the first day of the workweek is best. It’s called the Monday effect or the weekend effect. Anecdotally, traders say the stock market has had a tendency to drop on Mondays.

Best Day of the Week to Sell Stocks

If Monday may be the best day of the week to buy stocks, then Friday may be the best day to sell stock—before prices dip on Monday. If you’re interested in short selling, then Friday may be the best day to take a short position (if stocks are priced higher on Friday), and Monday would be the best day to cover your short.

Best Month to Buy Stocks

So, in terms of seasonality, the end of December has shown to be a good time to buy small caps or value stocks, to be poised for the rise early in the next month. There’s another advantage: Many investors start to sell stocks en masse at year’s end, especially those that have declined in value, to claim capital losses on their tax returns

Best Month to Sell Stocks

September is traditionally thought to be a down month. October, too, has seen record drops of 19.7% and 21.5% in 1907, 1929, and 1987.3 These mark the onset of the Panic of 1907, the Great Depression, and Black Monday. As a result, some traders believe that September and October are the best months to sell stocks.

Best Date of the Month

There is no single day of every month that’s always ideal for buying or selling. However, there is a tendency for stocks to rise at the turn of a month. This tendency is mostly related to periodic new money flows directed toward mutual funds at the beginning of every month.

In addition, fund managers attempt to make their balance sheets look pretty at the end of each quarter by buying stocks that have done well during that particular quarter. Stock prices tend to fall in the middle of the month.

So a trader might benefit from timing stock buys near a month’s midpoint—the 10th to the 15th, for example. The best day to sell stocks would probably be within the five days around the turn of the month.

The Bottom Line

These suggestions for the best time of day to trade stocks, the best day of the week to buy or sell stocks, and the best month to buy or sell stocks are generalizations, of course. Exceptions and anomalies abound, depending on news events and changing market conditions.