What a Daylight Trade?
Daylight trades are simply trading activity that involves the purchase and the sale of the same security within a single trading day. An investor may buy a given security in the morning, only to sell that same security in the afternoon. This type of short sale and cover activity is sometimes used to take advantage of a short-term upswing in the value of a given security that is not anticipated to last. Sometimes referred to as a day trade, the daylight trade is one of the strategies utilized when an investor wants to get in, make a quick profit, and get out. Typically, the process involves identifying a security or securities that are expected to rise substantially in value during the course of the day. The investor will buy early in the day, before the price per share begins to take off. Throughout the course of the day, the investor will monitor the progress of the securities and hopefully identify the peak price that will post for the day. At a point where the investor believes the
