An overnight position refers to a trade that remains open from one trading day into the next. In the context of trading cryptocurrencies, it involves holding a position after the market closes on a given day, with the intention of closing it later. Traders may opt for overnight positions for several reasons.

They might anticipate favorable market movements or want to capitalize on ongoing trends that could extend beyond a single trading day. However, keeping a position overnight comes with risks, especially in the volatile crypto market. Prices can fluctuate significantly during off-hours or due to external factors like news or regulatory changes, which can impact the asset’s value.

Traders often need to consider fees associated with holding positions overnight, such as interest on leveraged trades or exchange costs. As a result, managing overnight positions requires careful planning and risk assessment to protect against potential losses.