Why most of apple stock price since 10years have been gained overnight?
"I'll answer this question: ""Why do intraday traders close their position at then end of day while most gains can be done overnight (buy just before the market close and sell just after it opens). Is this observation true for other companies or is it specific to apple ?"" Intraday traders often trade shares of a company using intraday leverage provided by their firm. For every $5000 dollars they actually have, they may be trading with $100,000, 20:1 leverage as an example. Since a stock can also decrease in value, substantially, while the markets are closed, intraday traders are not allowed to keep their highly leveraged positions opened. Probabilities fail in a random walk scenario, and only one failure can bankrupt you and the firm."
PS: I have made no money. I am an Apple fan Boy - 12 year certed tech and former genius. I am running ios11pb2 on my 7plus.   Just as Horace Deidu showed us where the industry was discounting Apple back with the rise of the iPhone &amp; ipad, Ben Thompson at stratechery has been writing article after article about Amazon’s strategy.   And everything he has been writing for a couple years now about amazon is coming true - and it is a good lens to view the Whole Food purchase.   However the stock turns out has no bearing on what the company is doing nor is a remotely reasonable way to compare companies.   Being an Apple fan since the stock was 13/share has taught me that. "Number 2 cannot occur. You can buy the call back and sell the stock, but the broker won't force that #2 choice. To trade options, you must have a margin account. No matter how high the stock goes, once ""in the money"" the option isn't going to rise faster, so your margin % is not an issue.  And your example is a bit troublesome to me. Why would a $120 strike call spike to $22 with only a month left? You've made the full $20 on the stock rise and given up any gain after that. That's all. The call owner may exercise at any time. Edit: @jaydles is right, there are circumstances where an option price can increase faster than the stock price. Options pricing generally follows the Black-Scholes model. Since the OP gave us the current stock price, option strike price, and time to expiration, and we know the risk free rate is <1%, you can use the calculator to change volatility. The number two scenario won't occur, however, because a covered call has no risk to the broker, they won't force you to buy the option back, and the option buyer has no motive to exercise it as the entire option value is time premium." "This forum is not intended to be a discussion group, but I would like to add a different perspective, especially for @MrChrister, on  @littleadv's rhetorical question  ""... estates are after-tax money, i.e.: income tax has been paid on them,    yet the government taxes them again. Why?"" For the cash in an estate, yes, that is after-tax money, but consider other assets such as stocks and real estate. Suppose a rich man bought stock in a small computer start-up company at $10 a share about 35 years ago, and that stock is now worth $500 a share. The man dies and his will bequeaths the shares to his son. According to US tax law, the son's basis in the shares is $500 per share, that is, if the son sells the shares, his capital gains are computed as if he had purchased the shares for $500 each. The son pays no taxes on the inheritance he receives. The deceased father's last income tax return (filed by the executor of the father's will) does not list the $490/share gain as a capital gain since the father did not sell the stock (the gain is what is called an unrealized gain), and so there is no income tax due from the father on the $490/share. Now, if there is no estate tax whatsoever, the father's estate  tax return pays no tax on that gain of $490 per share either. Would this be considered an equitable system? Should the government not tax the gain at all? It is worth noting that it would be possible for a government to eliminate estate taxes entirely, but instead have tax laws  that say that unrealized gains on the deceased's property would be taxed (as capital gains) on the deceased's final tax return." "There are several reasons. First, if you sell your stock ""at any price"", you may be selling it for less than you originally bought it for.  Thus you will take a loss right at the beginning of your scheme.  If you ""rinse and repeat"", the problem only gets worse.  Every time you sell your stock, you will have to sell it at an even lower price in order to lower the price even more.  Then you buy it back and. . . just resell it an even lower price?  It should be clear that you are not making any money this way. Second, even if you don't sell it at an absolute loss, you must sell it at a relative loss in order to lower the price.  In other words, if someone will currently buy your shares for $X, and you want to lower the price, you must sell them for less than $X.  But you could have made more money by selling them for $X, since someone was already willing to buy them at that price.  In order to bring the price down significantly, you have to sell the stock for less than people currently believe it is worth, which means you're incurring a loss relative to just selling it at the market rate.  Of course, you can still make money if it goes back up again, but selling it at an extra loss this way just makes it harder to break even. Third, if you sell the stock at $X, whoever you sold it to is not going to sell it right back to you at $X, because then they would not make any money.  You could in theory buy it from someone else, but the same principle holds: if the stock price has just gone down, people who have it may be waiting for it to go back up.  This is doubly true if anyone suspects you have been trying to manipulate the stock price, because they will then suspect that the price drop is artificial and it will soon go back up. Fourth, even if someone did sell it right back to you at the price you sold it for, then what?  You now hold the stock at a lower price, but you don't gain unless it goes back up.  If it wasn't going up before until you took action, there is no reason to suppose it will go back up now.  In fact, if you had enough shares to significantly influence the price, other people may have been fooled into thinking the value is actually lower now. The basic problem is that, in order for you to buy it at a low price, someone else has to sell it at that low price.  It is easy to sell someone a stock for less than it's worth, but it will be hard to get people to sell it back to you for less than it's worth.  If you engage in deceptive practices to get people to do this, you may be guilty of securities fraud." "Probably the best way to investigate this is to look at an example. First, as the commenters above have already said, the log-return from one period is log(price at time t/price at time t-1) which is approximately equal to the percentage change in the price from time t-1 to time t, provided that this percentage change is not big compared to the size of the price. (Note that you have to use the natural log, ie. log to the base e -- ln button on a calculator -- here.) The main use of the log-return is that is a proxy for the percentage change in the price, which turns out to be mathematically convenient, for various reasons which have mostly already been mentioned in the comments. But you already know this; your actual question is about the average log-return over a period of time. What does this indicate about the stock? The answer is: if the stock price is not changing very much, then the average log-return is about equal to the average percentage change in the price, and is very easy and quick to calculate. But if the stock price is very volatile, then the average log-return can be wildly different to the average percentage change in the price. Here is an example: the closing prices for Pitchfork Oil from last week's trading are: 10, 5, 12, 5, 10, 2, 15. The percentage changes are: -0.5, 1.4, -0.58, 1, -0.8, 6.5 (where -0.5 means -50%, etc.) The average percentage change is 1.17, or 117%. On the other hand, the log-returns for the same period are -0.69, 0.88, -0.88, 0.69, -1.6, 2, and the average log-return is about 0.068. If we used this as a proxy for the average percentage change in the price over the whole seven days, we would get 6.8% instead of 117%, which is wildly wrong. The reason why it is wrong is because the price fluctuated so much. On the other hand, the closing prices for United Marshmallow over the same period are 10, 11, 12, 11, 12, 13, 15. The average percentage change from day to day is 0.073, and the average log-return is 0.068, so in this case the log-return is very close to the percentage change. And it has the advantage of being computable from just the first and last prices, because the properties of logarithms imply that it simplifies to (log(15)-log(10))/6. Notice that this is exactly the same as for Pitchfork Oil. So one reason why you might be interested in the average log-return is that it gives a very quick way to estimate the average return, if the stock price is not changing very much. Another, more subtle reason, is that it actually behaves better than the percentage return. When the price of Pitchfork jumps from 5 to 12 and then crashes back to 5 again, the percentage changes are +140% and -58%, for an average of +82%. That sounds good, but if you had bought it at 5, and then sold it at 5, you would actually have made 0% on your money. The log-returns for the same period do not have this disturbing property, because they do add up to 0%.  What's the real difference in this example? Well, if you had bought $1 worth of Pitchfork on Tuesday, when it was 5, and sold it on Wednesday, when it was 12, you would have made a profit of $1.40. If you had then bought another $1 on Wednesday and sold it on Thursday, you would have made a loss of $0.58. Overall, your profit would have been $0.82. This is what the average percentage return is calculating. On the other hand, if you had been a long-term investor who had bought on Tuesday and hung on until Thursday, then quoting an ""average return"" of 82% is highly misleading, because it in no way corresponds to the return of 0% which you actually got!  The moral is that it may be better to look at the log-returns if you are a buy-and-hold type of investor, because log-returns cancel out when prices fluctuate, whereas percentage changes in price do not. But the flip-side of this is that your average log-return over a period of time does not give you much information about what the prices have been doing, since it is just (log(final price) - log(initial price))/number of periods. Since it is so easy to calculate from the initial and final prices themselves, you commonly won't see it in the financial pages, as far as I know.  Finally, to answer your question: ""Does knowing this single piece of information indicate something about the stock?"", I would say: not really. From the point of view of this one indicator, Pitchfork Oil and United Marshmallow look like identical investments, when they are clearly not. Knowing the average log-return is exactly the same as knowing the ratio between the final and initial prices." The price gaps up because the offer is for a price above the current price. Therefore people want to buy now before the price jumps to the offer level. Of course it does depend on the tone of the announcement,  which party is making the announcement, and are they announcing an offer or a deal. If the price is $10, and the offer is for $12; then the price may quickly jump. The early buyers will make the most quick money. They hope that the deal is done quickly, or if not the final price ends up higher.  There are risks. The company could reject the offer. The due diligence could expose a problem. The regulators could reject the deal based on anti-trust issues. The deal could take many months to complete. Or the final deal could be for shares in the new company.  The risks are one reason people sell after the deal/offer is announced. In other cases the seller finally is seeing a profit, or a smaller loss and wants out while they can. Why wouldn't you expect a long-term profit?  Say you buy 100 shares of company X, selling for$1/share today.  You hold it for 20 years, after which it's worth $10/share (in inflation-adjusted dollars).  So you've made a profit, only making two trades (buy & sell).  What the algorithmic traders have done with short-term trades during those 20 years is irrelevant to you. Now expand the idea.  You want some diversification, so instead of one stock, you buy a bit of all the stocks on whatever index interests you, and you just hold them for the same 20 years.  How has what the short-term traders done in the intervening time affected you? Don't ever quantify a stock's preference/performance just based on the dividend it is paying out Volatility defined by movements in the the stock's price, affected by factors embedded in the stock e.g. the corporation, the business it is in, the economy, the management etc etc. Apple wasn't paying dividends but people were still buying into it. Same with Amazon, Berkshire, Google. These companies create value by investing their earnings back into their company and this is reflected in their share prices. Their earnings create more value in this way for the stockholders. The holding structures of these companies also help them in their motives. Supposedly $100 invested in either stocks. For keeping things easy, you invested at the same time in both, single annual dividend and prices more or less remain constant. Company A: $5/share at 20% annual dividend yield.  Dividend = $20 Company B: $10/share at 20% annual dividend yield  Dividend = $20 You receive the same dividend in both cases. Volatility willn't affect you unless you are trading, or the stock market tanks, or some very bad news comes out of either company or on the economy. Volatility in the long term averages out, except in specific outlier cases e.g. Lehman bankruptcy and the financial crash which are rare but do happen. In general case the %price movements in both stocks would more or less follow the markets (not exactly though) except when relevant news for either corporations come out.