Bicoastal Trading…or Are You Trading in the Right Time Zone?

Last week I had a chance to trade on both coasts of the United States. Even though I grew up on the East Coast, I must say that I am more enamored with the manner in which the West Coast trading day fits into my life than the East Coast variant.

Assuming that you are trading NYSE hours of 9:30 to 4:00 ET, here the pros and cons of each time zone, at least as I see them.

East Coast / ET

Pros

• Anything that happens overnight can be fully digested before the market opens the next morning
• No need to bother to check with Asia or do any homework before you go to sleep
• If desired, you can easily put in 3-4 hours of preparation time before the market opens
• Working hours are closely correlated with those of your friends and family

Cons

• If you have all that time after waking and before the market opens, there is a tendency to think you need to fill it up with research and analysis
• After hours trading, West Coast earnings conference calls, and other end of day activities can easily screw up dinner plans
• The market seems like it is open all day long
• If you hope to trade in addition to another full-time job, there is too much time overlap for intra-day trading
  
  

West Coast / PT

Pros

• The market closes at 1:00 p.m., so if you manage your time (and investments) well, you can have many of those afternoons off
• After hours trading and earnings conference calls are a breeze – and still leave you with half of the afternoon free
• Because of the lack of extended morning preparation time, there is a greater tendency to watch and wait during the first half hour the markets are open, rather then rush to open positions
• A part-time trader can get at least 1-2 hours of live market action in before going to work

Cons

• No sleeping in
• If you have to commute anywhere, you are forced to become part night owl
• Either you get up really early or (perhaps ‘and’) you must check on Asia and Europe each night before you go to sleep
• There is no guarantee that you can absorb all the relevant information and formulate a solid trading plan in the time available before the markets open
  
  

The Solution?

Since I started trading full-time, I have often thought that the perfect time zone to trade in was Mountain time. Jackson Hole? Telluride? In theory, at least, this would provide a good balance between having the necessary morning preparation time and the opportunity to take the better part of the afternoon off after the markets are closed for skiing, hiking, mountain biking or whatever the local environment offers. Since I mentioned Jackson Hole, Wyoming has an extremely advantageous set of tax laws (save property taxes) too.

For now I’m staying in the San Francisco Bay Area, getting up early, and paying a 9+% state income tax. Every afternoon I have off, though, I thank my lucky stars and try to spend my geography dividend.