One of the most profitable seasonal stock market trades in the past century has been the Santa Claus Rally. How can traders take advantage of the Santa Claus trade? Here’s a look at the numbers.

What Is The Santa Claus Trade?

The Santa Claus Rally refers to the tendency for stocks to rally during the last five trading days of a year through the first two trading days of the New Year. Historically, the S&P 500 has averaged a 1.8 percent gain during this period since 1928 and has produced a positive return 78 percent of the time.

Statistical Scrutiny

While many Wall Street idioms and rules of thumb are…

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