Overnight Trading refers to the buying and selling of financial instruments, such as stocks, derivatives, or currencies, outside of regular trading hours. Overnight trading typically takes place during the time when financial markets are closed, which is usually after the close of the stock exchange in the evening and before it opens again in the morning.During overnight trading, buyers and sellers can place orders through electronic trading platforms or over-the-counter (OTC) markets. The prices at which these trades are executed are based on the underlying asset's closing price on the previous trading day and any news or events that may have occurred after the markets closed.Overnight trading can be used by traders and investors to take advantage of price movements and to manage their risk. For example, a trader who believes a stock will go up in price may place a buy order overnight to be executed when the market opens the next morning, while a trader who thinks a stock will go down in price may place a sell order overnight to be executed when the market opens the next day.It's important to note that overnight trading carries some additional risks, such as the risk of gap opens (when the market opens at a significantly different price than the previous close), and the risk of overnight news or events affecting the price of the asset. As a result, traders and investors need to be aware of these risks and carefully consider their overnight trading strategies.
