In the futures markets, holiday trading poses a collection of unique challenges. Abnormally thin market depth frequently results in choppy price action, wide bid/ask spreads, and increased slippage. Each of these factors can undermine your profitability and reduce trade-related efficiency.
For anyone who is active in the markets, it’s a good idea to periodically review the yearly futures trading holiday schedule. This will help you anticipate and avoid periods of subpar trading conditions. Dead markets can be profit killers. Unless your strategy is designed to thrive in such an environment, it’s usually best to kick back and wait for the action to return to full strength.
Futures Trading Holiday Schedule for 2020
A holiday session is one during which the exchanges “halt” operations early or are closed altogether. As a general rule, the trading volumes on holidays are much lower than normal because a large portion of regular traders are on vacation.
Although lagging participation is typically the case, each market closure features a unique set of circumstances. Even though an early halt to the trading day typically includes low volatility and relatively quiet conditions, this scenario isn’t 100 percent guaranteed. Occasionally, large block orders can instantly sweep prices higher or lower. Because of the inconsistent order flow, it can be inherently risky to trade on or around holiday sessions.
The premier destination for active derivatives traders is the Chicago Mercantile Exchange (CME). Featuring 19.2 million contracts in average daily volume (ADV) for 2019, the CME is the largest futures exchange in the world. Here is the CME’s futures trading holiday schedule for 2020:
|US Holiday||Impacted Dates||Market Close/Early Halt|
|Dr. Martin Luther King, Jr. Day||January 17-21, 2020||1/20/20 Early Halt|
|President’s Day||February 14-18, 202||2/17/20 Early Hal|
|Good Friday||April 9-13, 2020||4/10/20 Closed|
|Memorial Day||May 22-26, 2020||5/25/20 Early Halt|
|Independence Day||July 2-6, 2020||7/3/20 Early Halt|
|Labor Day||September 4-8, 2020||9/7/20 Early Halt|
|Thanksgiving||November 25-27, 2020||11/26/20 Early Halt|
|Christmas||December 24-28, 2020||12/25/20 Closed
|New Year’s||Dec. 31, 2020-Jan. 4, 2021||1/1/21 Closed|
**Early Halt designates a 12 p.m. CST closure
It’s important to remember that the CME’s futures trading holiday schedule doesn’t become official until two weeks prior to each date in question. In addition, exact holiday session opening and closing times may vary on a product-by-product basis. Because of these two factors, it’s a good idea to check out the official CME calendar several days ahead of any listed holiday.
If you’re actively trading products on the Chicago Futures Exchange (CFE), referring to the CFE’s futures trading holiday schedule will be necessary. The designated holidays are the same, but session times and product schedules may vary. For more information on the CFE’s calendar, refer to its website.
Holiday Trading Is No Vacation!
By far, the No. 1 pitfall that most unsuccessful traders fall victim to is haphazard risk management. Unfortunately, the apparent “slow” holiday trading conditions are perceived by many as presenting a lessened risk profile. This is often simply not the case―illiquid markets, such as those found on holidays, can be extremely difficult to trade.
Ultimately, there’s nothing wrong with taking a break from the markets. Sometimes recharging your batteries while spending time with family and friends is more valuable than grabbing a winning trade during a holiday session. To stay abreast of the current futures trading holiday schedule and all key dates in the market, check out Daniels Trading’s Futures Calendars & Reference Guide.