WallStreetBets Trading Strategies and Sentiment for 2025 Christmas Eve Trading Sessions

The 2025 Christmas Eve trading session featured early closures for U.S. stock exchanges (NYSE/Nasdaq closed at 1:00 PM ET for stocks, 1:15 PM ET for eligible options) followed by a full market closure on December 25, leading to reduced liquidity [3][4][5]. Market data for the S&P 500 ETF (SPY) shows a 1.35% increase from December 1–23, 2025, closing at $687.96 with a price range of $671.20–$689.25. SPY exhibited low daily volatility (0.54% standard deviation), average daily volume of 81.84M shares, and bullish MACD and KDJ technical indicators [0].

WallStreetBets (WSB) retail investors showed bullish sentiment targeting SPY, prioritizing OTM calls to capitalize on potential holiday momentum. The thin market liquidity was identified as a factor amplifying gamma squeeze risks [1]. Analysis from r/AltStreetBets further highlighted a potential gamma squeeze setup for SPY 0DTE options, supported by volatility compression, put/call ratio divergence, and institutional flow positioning [2]. Broader market optimism for a year-end “Santa Claus rally” (driven by easing trade concerns and small-cap momentum) reinforced this bullish positioning [6]. To mitigate theta decay risks—critical for short-term options expiring near the early Christmas Eve close—investors focused on high-volume strike prices [1].

1. Thin holiday liquidity amplifies 0DTE options impact
   : The early market closure reduced participation, making price moves more sensitive to options trading activity. Market makers’ gamma hedging (adjusting positions to maintain neutral exposure) could trigger gamma squeezes, a target for WSB strategies.
2. Theta decay mitigation is critical for short-term strategies
   : The compressed trading window on Christmas Eve accelerated theta decay (erosion of options value over time), leading investors to prioritize high-volume strike prices to reduce this risk.
3. Santa Claus rally sentiment aligns with WSB positioning
   : Broader market optimism for a year-end rally converged with WSB’s bullish momentum plays on SPY, potentially amplifying upward pressure in the thin holiday market.

• Thin liquidity volatility
  : Reduced market participation increases bid-ask spreads and the likelihood of sharp, unpredictable price swings, which could reverse momentum plays [3].
• Sideways trend limitations
  : SPY’s sideways trading range ($681.99–$691.41 [0]) suggests limited sustainability for momentum-driven gains.
• Data gaps
  : Direct WSB discussion content was not fully accessible due to platform limitations, so exact strategy details may vary from inferred sentiment.

• Potential gamma squeezes
  : Persistent bullish 0DTE options positioning on SPY could trigger gamma squeezes, offering short-term upside [1][2].
• Santa Claus rally tailwinds
  : Broader market optimism for a year-end rally may provide additional support for bullish momentum plays [6].

• 2025 Christmas Eve market schedule
  : NYSE/Nasdaq closed at 1:00 PM ET (stocks), 1:15 PM ET (eligible options), with full closure on December 25 [3][4][5].
• SPY performance (Dec 1–23, 2025)
  : +1.35% return, closing at $687.96, with low daily volatility and bullish MACD/KDJ indicators [0].
• WSB sentiment & strategies
  : Bullish on SPY, with focus on 0DTE options, OTM calls, and exploiting potential gamma squeezes [1][2].
• Holiday market influence
  : Thin liquidity amplifies options-driven price moves, while investors mitigate theta decay with high-volume strikes [1].
• External factors
  : Santa Claus rally optimism reinforces bullish positioning [6].