Masking is strongly deteriorated in schizophrenia patients and to a lesser extent in their healthy relatives. For this reason, masking is a good endophenotype. Here, we show the EEG correlates of masking across the schizophrenia continuum in order to tackle the underlying mechanisms. First, we found that schizophrenia patients have strongly reduced amplitudes, as measured with the Global Field Power (GFP), compared to controls. The reduced amplitudes speak for attention allocation deficits in schizophrenia. Second, patients with first-episodes psychosis have reduced GFP amplitudes compared to controls, but higher amplitudes compared to schizophrenia patients. Their neural correlates are in an intermediate state, indicating a progressive development of the disease through time. In addition, the amplitude remains stable for at least one year, suggesting that serious deficits emerge at a later stage of the disease. Third, healthy participants with high schizotypal traits have reduced GFP amplitudes compared to low schizotypal participants. These deficits are similar to the ones of patients, though strongly attenuated, showing that the mechanism is independent of the individual’s state (health or disease). Fourth, healthy siblings of schizophrenia patients have, surprisingly, higher GFP amplitudes compared to controls. We propose that the siblings use a compensation mechanism to counterbalance for their masking deficits. Finally, patients with the 22q11.2 deletion syndrome have slightly higher GFP amplitudes compared to controls. We speculate it is due to a high co-morbidity. In conclusion, observers with psychosis traits/symptoms have difficulties to enhance faint visual information 200 ms after their onset which explains their lower performance.