Overnight Trading
Candlefocus EditorWhen it comes to US stocks, brokers that allow overnight trading may extend their after-hours trading session all the way up until the opening of the next trading day. This is beneficial for investors as it enhances liquidity in the markets and allows them to take advantage of price opportunities that may arise after the normal trading hours.
On the contrary, the Forex market opens 24 hours a day, five days a week and is mostly untouched by overnight trading. This is because foreign currency transactions between banks and businesses around the world are facilitated without a formal exchange.
Unlike Forex, bonds do have extended trading hours, and investors can take part in overnight trading in stocks from 4am to 9:30am Eastern Time when the exchanges open, and from 4pm when the exchanges close and 8pm Eastern Time.
The advantages of overnight trading include the potential for greater profits as it allows investors to stay ahead of the curve and react quickly to news or economic events before the markets have time to adjust. However, it also carries its own risks due to the increased volatility inherent in after-hours trading. As such, investors should be aware of the risks that come with the rewards.