Day Trading vs Position Trading
Michael Whitman
·
Trading since 2017, full-time since 2020
·
Published 2026-09-08
·
Updated
·
Reviewed
Day trading opens and closes every position within one session, so it never holds through a closed market. Position trading holds for weeks or months, so it sits through every overnight gap and weekend in exchange for moves far larger than a single session's.
These sit at the two ends of the holding-period range. One closes everything inside the day; the other holds through months of closed markets. On SPY that difference shows up in two numbers: how far price travels in the time each one holds, and how often the market opens far from where it closed.
What each one is
Day trading is flat by every close. Nothing is held while the market is shut, so every price the position meets is one it could have traded at. Day trading covers it.
Position trading holds for weeks or months. It sits through every overnight gap, weekend and earnings season in exchange for moves that take that long to develop. Position trading has the details; swing trading sits in the middle.
Both read the same charts. Levels and trends behave alike on every interval, whereas the two styles differ only in how long they hold what they see.
Where they differ
How far price travels while you hold. On SPY the median session moved less than half a percent from open to close; the median 60-session hold moved about 5%. The day trader’s target has to fit inside the first number.
What the gap does. The day trader never holds through one. The position trader meets every one, and a stop order does not protect against a price that opens beyond it.
How many decisions there are. Hundreds of round trips a year for one, a handful for the other, and each round trip pays the spread again.
How much time it takes. The session itself, every day, against an hour or two a week.
Which one to use: Day Trading or Position Trading?
Position trade when you cannot be present for every session. An intraday method squeezed around a job only gets run when there is a spare moment.
Position trade when you can size for a gap. On SPY about one hold in four met an open 2% or more below the prior close, and the size has to be one you can hold through it without being forced out.
Day trade when you cannot accept overnight risk at all, whether because of a mandate or a rule, and can be at the screen for the whole session.
And day trade only when the cost of a round trip is small next to a session’s move. The session’s move is about a tenth of a 60-session move, so the same spread weighs about ten times as much.
What a 60-session hold sat through on SPY
The test. Every SPY close from 29 December 1995 to 9 July 2026 was treated as an entry and the close 60 sessions later as the exit: 7,680 overlapping holds. Each session’s gap is its open against the prior close, after taking off any dividend paid that day.
Moves were about 11 times larger. The median session since 2 January 1996 moved 0.461% from open to close, up or down. The median 60-session hold moved 5.017%, up or down, about 11 times as far.
One hold in four met a big lower open. 2,069 of the 7,680 holds (26.94%) included at least one open 2% or more below the prior close, and 722 (9.40%) one of 3% or more. Over the whole span, 80 sessions opened 2% or more lower and 67 opened 2% or more higher.
Bunched gaps, and holds that recovered
The gaps came in bunches. Thirteen of the 30 full years from 1996 to 2025 had no 2% lower open at all. 2008 had 16 and 2020 had 14. The largest was on 16 March 2020, an open 10.45% below the prior close; the largest upward was 6.13%, on 19 September 2008.
A gap did not decide the hold. Of the 2,069 holds that met a 2% lower open, 1,038 still ended higher (50.17%), against 69.15% of all holds. The gap cost more often than not, but about half recovered within the 60 sessions.
The original data
The sample. Yahoo Finance SPY history, daily, with every open, close and ex-dividend date from 29 January 1993 to 2 October 2026. Opens are used only from 2 January 1996; SPY’s older Yahoo opens frequently just repeat the close before.
How to read the holds. They overlap: a 2% lower open sits inside up to 60 of them, so the 26.94% is a share of days on which a position could have been opened, not a count of separate events.
What is not measured. No spreads, commissions, dividends paid to the holder or strategy results are here, and nothing is shown to predict a gap. Every hold, its change and its worst open are in the SPY 60-session holds file, and the SPY opening gaps file has every session’s gap.
When it fails
The failure is a position trade sized as if its stop order were a hard limit. On SPY about one hold in ten met an open 3% or more below the prior close, and in March 2020 one open was more than 10% lower. A stop resting 2% under the prior close is filled at or near that open, wherever it is. A position sized for a 2% loss then takes several times that, and the trader who planned around the stop finds out the size was the real risk control all along.
The second failure is running an intraday method between other commitments. The rules assume you are there for every session.
A third is comparing the two on returns while leaving out the costs and the hours.
A fourth is a long horizon with no gap tolerance. It will be tested within a few months.
And a fifth is switching horizons after a losing run. The gap risk or the cost arithmetic comes with you.
Related
Day trading covers the intraday horizon. Position trading covers the multi-month one. And swing trading covers the horizon between them.
Decide before you choose a holding period whether you can sit through an open 3% against you without acting on it. About one 60-session hold in ten on SPY met one, and no stop order prevents it.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money.