Almost like clockwork, tax loss selling hits on the last trading day of the year. This annual pattern happens so predictably because investors unload losing positions and lock in tax deductions. Normally, market makers would step in and buy these sell orders right away, however on ‘Tax Loss Harvest Day’, they don’t. Instead, they wait until the sellers get desperate. Inevitably, these stocks plummet because market orders flood in as the sellers panic to get filled. This offers savvy traders a low risk opportunity for potentially high rewards.
Here’s just some of what is included: