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Optimize Your Profitability by Trading the Overnight Futures Hours

May 25, 2021 by Daniels Trading| Futures 101

Unlike Wall Street, the futures markets are open for business on a near-24/5 basis. For the active trader, these extended futures hours open the door to countless opportunities and strategic possibilities. Let’s take a look at the essential tenets of overnight trading.

The U.S. Overnight Session

The rise of the electronic marketplace has given futures exchanges the ability to facilitate trade around the clock. Aside from a short break to clear and finalize each session’s transactions, vendors supply continuous market access to their clientele. People are no longer geographically limited; motivated individuals are free to trade markets around the world, regardless of time constraints.

Business Hours

In the United States, overnight futures hours are those that fall between each session’s daily halt and the next day’s morning open. However, it is important to realize that the morning open isn’t necessarily a concrete time, but rather a period when American markets begin trading with “normal” liquidity. Generally, 7 a.m Central Standard Time (CST) is a safe estimate of when U.S. liquidity providers will begin addressing the markets.

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Here is a listing of the overnight hours for several of the Chicago Mercantile Exchange’s (CME) most popular products (all times CST):

Product Symbol Daily Halt/Reopen Morning Open
E-mini S&P 500 ES 3:15-3:30 p.m, 4 p.m./5 p.m. 7:30 a.m.
Gold GC 4 p.m./5 p.m. 7 a.m.
WTI Crude Oil CL 4 p.m./5 p.m. 7:30 a.m.
Corn ZC 1:20 p.m./7 p.m. 8:30 a.m.
Euro FX 6E 4 p.m./5 p.m. 7 a.m.

As you can see, the timing of each session’s trading halt differs according to the product. Also, the hours when standard participation resumes vary according to asset class and the day’s economic calendar.

Market Attributes

If you’re going to attempt overnight trading, then it is important to understand that not all futures hours are equal. For example, 1 a.m. CST isn’t the same as 8:30 a.m. CST! Here are several overnight nuances that traders need to be aware of:

  • Reduced liquidity: Compared to the standard U.S. session, most futures contracts trade with a vastly reduced market depth. This can lead to larger bid or ask spreads, choppy price action, and increased slippage. However, the limited volumes can bring opportunities to viable breakout and position trading strategies.
  • International opening bells: The U.S.-based futures markets are global in scope. Subsequently, the opening bell of several major sessions typically enhances participation. Two key times to be aware of are the Asian (Tokyo, 6 p.m. CST) and European (London, 2 a.m. CST) openings.
  • Global economic calendar: International economic reports, government disclosures, and central banking announcements can all bring instant volatility to the markets. To trade overnight successfully, it is important to outline the session’s featured events on a 24-hour horizon.
  • Margin requirements: Because of the unique market conditions of the overnight session, margins may be adjusted by the exchange and brokerages to account for any added risk. As always, it is up to the trader to find out the required margin for the contract being traded.

In addition to these four factors, it is critical to stay abreast of current market conditions. As an example, during the COVID-19 financial panic of March 2020, the futures markets regularly traded with heavy volumes throughout the U.S. overnight. Trade of the E-mini S&P 500 was even halted on multiple occasions during March 2020 due to violation of the CME’s dynamic circuit breakers.

Attack the Markets 23/5 with Daniels Trading

One of the great things about the modern marketplace is accessibility. As long as you have an internet connection, risk capital, and a brokerage account, you can trade any futures hours you deem fit.

If you’re interested in trading the overnight session, dt Pro can help. Featuring live exchange-direct data, advanced order entry, and powerful charts, the platform is your 23/5 window to the marketplace. When you’re ready, sign up for a free 14-day trial here.

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Filed Under: Futures 101

About Daniels Trading

Daniels Trading is division of StoneX Financial Inc. located in the heart of Chicago’s financial district. Established by renowned commodity trader Andy Daniels in 1995, Daniels Trading was built on a culture of trust committed to a mission of Independence, Objectivity and Reliability.

Risk Disclosure

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

© 2023 StoneX Group Inc. All Rights Reserved

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Risk Disclosure

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

© 2023 StoneX Group Inc. All Rights Reserved

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