What Is an Overnight Position?
An overnight position is any trade still open at the end of the trading day, carried through to the next session rather than closed out beforehand. It remains exposed to whatever happens in the market while it’s held.
Why Overnight Positions Incur Rollover Fees
Holding a leveraged position overnight typically involves a rollover, or swap, fee, which reflects the interest rate differential between the two currencies or assets involved, or the cost of financing the position itself. Depending on the direction of the position and the rate differential, this fee can either be charged or credited.
How Overnight Positions Differ From Day Trades
Day traders aim to close all positions before the market session ends, avoiding overnight exposure altogether, while traders who hold positions overnight accept that exposure, often because their strategy operates over a longer timeframe.
Overnight Markets Can Gap: What to Keep in Mind
As a precaution, prices can move significantly between one session’s close and the next one’s open, particularly around news events, meaning an overnight position can be affected by price gaps that wouldn’t occur during continuous daytime trading.
Carrying a Trade Into Tomorrow
An overnight position simply reflects a choice to keep a trade open beyond the trading day, along with the costs and exposure that come with it. Weighing those factors against a trading strategy’s goals is part of deciding whether to hold or close out.
⚠ Risk Warning:CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. Ensure you fully understand how CFDs work and whether you can afford to take the high risk of losing your money.
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