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. Forex - FX

    The market in which currencies are traded. The forex market is ...
  2. Transaction Exposure

    The risk, faced by companies involved in international trade, ...
  3. Position

    The amount of a security either owned (which constitutes a long ...
  4. Foreign-Exchange Risk

    1. The risk of an investment's value changing due to changes ...
  5. Overnight Trading

    The buying or selling of currencies between 9pm and 8am local ...
  6. Risk Management

    The process of identification, analysis and either acceptance ...
Related Articles
  1. The Fundamentals Of Forex Fundamentals
    Forex Education

    The Fundamentals Of Forex Fundamentals

  2. A Primer On The Forex Market
    Options & Futures

    A Primer On The Forex Market

  3. Top 7 Questions About Currency Trading ...
    Forex Education

    Top 7 Questions About Currency Trading ...

  4. 8 Basic Forex Market Concepts
    Forex Education

    8 Basic Forex Market Concepts

comments powered by Disqus
Hot Definitions
  1. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  2. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  3. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  4. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  5. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
  6. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
Trading Center