Stock market trading costs for regular people significantly decrease when professional financial analysts go on summer vacation.
March 31, 2026
Original Paper
The Holiday Effect on the Oslo Stock Exchange
SSRN · 6228158
The Takeaway
Standard logic suggests that fewer traders (lower liquidity) should make trading more expensive. However, when analysts leave for the holidays, 'adverse selection' risk drops because there are fewer people with 'information advantages' in the room, allowing market makers to safely lower the fees they charge everyone else.
From the abstract
<div> We use seasonality in market participation associated with Norwegian holidays as a source of exogenous variation to study the holidays effect on the relative bid-ask spread and trading volume on the Oslo Stock Exchange (OSE). Outbound air-travel serves as a proxy for holiday intensity. We study daily data for a balanced sample of 90 small-, mid-and large-cap stocks from 2014 to 2019 and use 2020 to 2024 as an out-of-sample period. Trading volume and the relative bid-ask spread, estimated f