FTSE100 & The Santa Claus Rally

Since 1980 there have been 33 years where December has returned a positive for traders who trade just the Santa Claus Rally in the FTSE100. With an average return of 2% for December alone, this can be a great way to top up the profits and get an end of year bonus. Trading the probabilities means that there will be some down Decembers but the odds are on your side for a positive return. The Christmas holiday break means that there is generally a 50:50 chance of making money in the first half of the month as trading desks square up trades and volume gets thin. This creates wider spreads as there is less liquidity and traders tend to back off from illiquid markets. But as we get into the second half and towards the end of the year, things can really float higher as anyone who would actively short is usually away from their screens and enjoying some time off and trying to keep the gains they made earlier, whereas speculators and retail traders tend to step in for a punt.

For more trading details, please check the hyperlinks with time stamp indicated from the video:

0:14 FTSE100