The story
From the idea that one might stay in a bed and breakfast, since the trades take place on two consecutive days.
Etymology from Wiktionary, CC BY-SA 4.0.
bed-and-breakfast deal
Today it means: The practice of selling a position on the last trading day of the year to establish a tax loss, and then repurchasing early on the first session of the new trading year, to restore the position. Full definition →