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| Weekend Effect |
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A term used to describe the phenomenon in financial markets in which stock returns on Mondays are often significantly lower than those of the immediately preceding Friday.
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The weekend effect has been a regular feature of stock trading patterns for many years. A number of theories offer explanations for this market behavior. Some theories suggest that the tendency for companies to release bad news on Friday after the markets close accounts for depressed stock prices on Monday. Others state that the weekend effect might be linked to short selling, which would affect stocks with high short interest positions. Or, the effect could simply be a result of traders' fading optimism between Friday and Monday.
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