Overnight Position

An overnight position refers to a trading position that is held overnight, meaning it is kept open after the market closes and is not closed or adjusted until the next trading day.

Holding a position overnight comes with overnight risk. Market conditions can change unexpectedly, and the trader might experience significant price moves when the market reopens.

For example, news reports released after market hours can create a gap in price when the market opens. The positions are also exposed to any news or events that might occur outside regular market hours. These events can affect the asset's price when the market reopens.

Additionally traders might incur fees for holding positions overnight. These are called swap fees, and they depend on the interest rate differential between the two currencies being traded.

Still in general, holding positions overnight can be a useful strategy for traders who want to capture longer-term market movements or take advantage of news and events occurring outside regular market hours. However, it comes with its own set of risks.