The Systematic Trader's Guide to Holiday Laziness
All signs point to the beach
I’ve done the research. I’ve crunched the numbers. I’ve consulted with experts and pored over the data.
And the conclusion is clear: you should be long equities and go to the beach.
This is not financial advice. This is permission.
The Evidence-Based Case for Doing Nothing
Right now, in late December, we’re experiencing an unusual confluence of bullish seasonal effects. They’re all stacking up at once, like the universe is conspiring to let you log off guilt-free.
Let me walk you through the rigorous, data-backed justification for your holiday laziness.
End of Month Flows. The last week of the month tends to be bullish for stocks, if other asset classes have gone up month-to-date, driven by rebalancing flows from mandated funds. We’re in it right now. Check.
FOMC Meeting Effect. The window around Fed announcements tends to be bullish for equities. We had one a couple of weeks ago. Check.
VIX Expiration. Both the day of VIX expiration AND the day before tend to be bullish. That’s two bullish days for the price of one calendar effect. Check.
Pre-Christmas Effect. The days leading up to December 25 tend to see reduced volatility and positive drift. Something about people being in a good mood, apparently. Check.
Pre-New Year Effect. Same deal for the days before January 1. More positive drift. More reduced volatility. More reasons to not check your phone. Check.
That’s five separate bullish effects, all happening in the same two-week window.
The Optimal Strategy
Based on all of this highly sophisticated analysis, I can now reveal the optimal trading strategy for late December:
Be long equities
Go on holiday
Don’t check your portfolio
Eat too much
Come back in January
This is peak systematic trading. We’ve done the research, so you don’t have to think about this over Christmas lunch.
Some Caveats
Look, these are probabilistic tendencies, not guarantees. Any individual period can do whatever it wants. The market doesn’t care about our holiday plans.
Also, front-end volatility is extremely cheap right now. If you’re thinking about selling options, consider going out to 1.5-2 months where vol is still reasonable, rather than selling 7-8 vol at the front end.
And if you’re a buyer of vol, short-dated straddles look cheap (not just low-priced). Something to consider if you think the market might actually do something interesting.
But for most of us? The boring answer is probably correct. Be long. Go away. Enjoy the break.
The Real Point
I’m being tongue-in-cheek here, obviously. But there’s a genuine insight buried in the absurdity.
Sometimes the right thing to do is nothing. Sometimes all the signals point in the same direction and you just... follow them. Sometimes the sophisticated, research-backed, evidence-based answer is “go to the beach.”
Systematic trading isn’t always about complexity. Sometimes it’s about recognising when conditions are favourable and having the discipline to do the simple thing.
The simple thing is to be long and not overthink it.
Not totally balls-out long. Just regular I-can-sleep-at-night long (I intend to take a break, after all).
So that’s what I’m doing. I’ll be at the beach with my family, not checking my phone, and celebrating the year that was.
Happy holidays. Merry Christmas. See you in 2026.
Cheers!
