{"term":{"slug":"overnight-holding-rules","term":"Overnight Holding Rules","definition":"Prop firm rules governing whether traders can hold positions open past the daily market close and into the next trading session. Firms that prohibit overnight holding force traders to be pure day traders; firms that allow it support swing and multi-day strategies.","extendedExplanation":"Overnight holding rules fundamentally determine what trading style is viable on a given prop firm account. Futures prop firms (TopStep, Apex) universally require positions to be flat before the daily settlement -- typically 4:00 PM CT for CME products. This means a futures prop firm trader cannot swing trade. Any position must be opened and closed within the same trading session.\n\nForex and multi-asset prop firms have more varied policies. FTMO, FundedNext, and The5%ers all permit overnight holding across forex pairs, indices, commodities, and other instruments. This allows traders to use daily, 4-hour, and weekly timeframes, implementing strategies that require holding positions for days or weeks. The trade-off is overnight swap costs (rollover fees) that accumulate on positions held across the daily close, and gap risk if the market moves significantly overnight.\n\nThe practical implication of overnight restrictions for futures traders: you cannot hold an ES long position into overnight earnings announcements, cannot capture the Asian session move on index futures, and cannot hold a position from a Wednesday entry and exit on Friday. Each of these would require rolling strategy significantly. Traders who primarily trade European or Asian session price action on US futures may find the overnight restriction makes their edge impossible to execute on restricted firms.","exampleWithNumbers":"TopStep $100K futures account: ES close at 4:00 PM CT. You are long 2 ES contracts, up $1,200 (24 ticks * $50 * 2). The position must close by 4:00 PM regardless of trend. You sell at market, capturing $1,200. After close, ES futures report earnings surprise, and overnight ES rallies 40 points. The position you were forced to close would have been worth an additional $4,000 (40 points * $50 * 2). On FTMO forex, a EUR/USD long held overnight through the same scenario (equivalent: positive USD news) could capture that additional move -- held positions continue running.","category":"trading","relatedTerms":["weekend-holding","news-trading-rules","static-drawdown","trailing-drawdown","funded-account"]},"_links":{"self":"https://runvigil.app/api/glossary/overnight-holding-rules","page":"https://runvigil.app/learn/overnight-holding-rules","allTerms":"https://runvigil.app/api/glossary","learn":"https://runvigil.app/learn"}}