Overnight Position Definition. What is an Overnight Position? This is a trade that remains open until the following business day. The forex trader is at risk during this period of time should any events of a fundamental nature transpire that would cause an immediate shift in investor sentiment toward his position before the next trading period opened. Forex traders must also be conscious of weekends and the impact of regional holiday periods as they may broaden their period of risk. Although events may also cause a positive impact on prices for the underlying currency, it is concern for negative impairment of a position that constitutes the exposure to risk.

Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.