Overnight Position

Any trade that is held through the market close and into the next trading session. Overnight positions carry gap risk -- the danger that news, earnings, or global events will cause the price to open significantly higher or lower than the previous close. Day traders avoid overnight positions by definition, while swing traders and investors accept the risk in exchange for the ability to capture multi-day moves. Futures and forex traders holding overnight positions also incur financing costs or receive credits depending on the direction of their trade and prevailing interest rates.