Overnight Position

AAA

DEFINITION of 'Overnight Position'

Trading positions not closed by the end of the trading day and held overnight. For securities trading, overnight positions expose the investor to risk because a number of events can negatively impact a position while the trading floor is closed.

INVESTOPEDIA EXPLAINS 'Overnight Position'

In forex trades, 5pm EST is considered the end of the trading day. Positions opened at 4:59pm EST and closed at 5:01pm EST are considered overnight positions because a new "day" begins after 5pm. Rollover interest is paid out or received on overnight positions based on the closing interest rate.

RELATED TERMS
  1. Risk Management

    The process of identification, analysis and either acceptance ...
  2. Overnight Trading

    The buying or selling of currencies between 9pm and 8am local ...
  3. Position

    The amount of a security either owned (which constitutes a long ...
  4. Transaction Exposure

    The risk, faced by companies involved in international trade, ...
  5. Foreign-Exchange Risk

    1. The risk of an investment's value changing due to changes ...
  6. Forex - FX

    The market in which currencies are traded. The forex market is ...
Related Articles
  1. Forex Education

    The Fundamentals Of Forex Fundamentals

    Charting is not the only way to analyze the foreign-exchange market. Learn how to apply fundamental analysis to the economic indicators.
  2. Options & Futures

    A Primer On The Forex Market

    Moving from equities to currencies requires you to adjust how you interpret quotes, margin, spreads and rollovers.
  3. Forex Education

    Top 7 Questions About Currency Trading Answered

    Whether you're puzzled by pips or curious about carry trades, your queries are answered here.
  4. Forex Education

    8 Basic Forex Market Concepts

    We go over some of the things you need to understand before you can trade currencies.
  5. Options & Futures

    Getting Started In Forex

    Before entering this market, you should define what you need from your broker and from your strategy.
  6. Forex Education

    The International Money Market

    Banks, corporations, traders and speculators all use the IMM to borrow, lend, trade, profit, finance, speculate and hedge risks.
  7. Forex Education

    Trading Forex With Binary Options

    Binary options are an alternative way, with a major advantage, for traders to play the forex market.
  8. Forex

    Steps To Open An Offshore Forex Account

    Here is a simple breakdown of how to open an offshore forex account for US-based users, including legal requirements.
  9. Fundamental Analysis

    Forex Exotic Currency Trading: Risks & Rewards

    Exotic currencies are off the beaten path and are not for novices, but experienced forex investors might find the high risk-reward potential exciting.
  10. Forex Education

    Understanding The Spread in Retail Currency Exchange Rates

    Understanding how exchange rates are calculated and shopping around for the best rates may mitigate the effect of wide spreads in the retail forex market.

You May Also Like

Hot Definitions
  1. Fixed-Charge Coverage Ratio

    A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated ...
  2. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  3. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  4. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  5. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  6. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
Trading Center