Most traders know that the regular trading hours for the stock market ends at 4 p.m. ET; however, traders can actually trade overnight using the futures or forex markets. If you have qualified trading accounts for these markets, you can trade futures, futures options, and currency, or forex, almost around the clock.
Trading the futures market overnight
The E-mini S&P 500 futures (traded under symbol /ES on the thinkorswim® trading platform) trades on Globex, CME Group's all-electronic trading platform, and is one of the products with the highest overnight trading volume.
Because CME Group is based in Chicago, E-mini S&P 500 futures trade on a schedule quoted in U.S. Central Time (CT). For /ES, the weekly trading hours begin on Sunday at 5 p.m. CT (market open) and end at 4 p.m. CT on Monday (market close). The daily schedule repeats throughout the week until Friday at 4 p.m. CT, at which time, trading is closed until the Sunday market open.
Other markets may have slight variations in their trading hours, such as futures contracts that cover a wide variety of assets including, but not limited to, agriculture (corn, soybeans, and wheat), energy (oil, gasoline, and natural gas), metals (gold, silver, and platinum), currency futures, and options on futures. Charles Schwab Futures and Forex closes daily at 4 p.m. CT and reopens at 5 p.m. CT. Trading closes for the weekend at 4 p.m. CT on Fridays.
Potential opportunities in overnight trading
One drawback when trading stocks and equity options during the regular trading session is that you can only do so for about one-third of the day, and if news breaks or market conditions change during the other two-thirds, there's limited ways to act on it. But when trading futures contracts, you can—and many traders do trade overnight.
Overnight trading in the futures market can provide potential opportunities to take advantage of news events that happen while the U.S. stock markets are closed, but it can also bring a higher risk of loss, lower liquidity with lower trading volume, and wider bid/ask spreads.
Additionally, some traders use futures as a proxy, in an attempt to help manage risk in their equity portfolios.
When potentially market-moving news breaks outside regular equity trading hours, it often influences futures, with some traders seeing futures as an "early warning signal." For example, if a trader is holding stocks that track the S&P 500® index (SPX) and news begins to unfold overnight, they could trade/ES as a way to potentially hedge their portfolio against a lower open.
Similarly, a trader holding energy companies might trade WTI Crude Oil futures (/CL) or other futures contracts that correlate with their holdings. Some traders see this type of overnight trading as a trading strategy to help them manage "overnight risk."
When watching for potential overnight trading opportunities, consider following news and announcements from sources like the European Central Bank (ECB) and the Bank of Japan (BoJ), as well as China's economic reports, most of which are scheduled ahead of time just like in the United States.
Some traders also look for market-moving news out of Asia when the Tokyo Stock Exchange opens at 7 p.m. CT and in Europe when the London Stock Exchange opens at 2 a.m. CT. Hours change as countries shift to and from daylight savings time.
Source: thinkorswim platform
For illustrative purposes only. Past performance does not guarantee future results.
Are futures right for your trade plan?
Futures, and Futures options trading involves substantial risk and is not suitable for all investors. Please read the Risk Disclosure Statement for Futures and Options to trading futures products.
Forex trading involves leverage, carries a substantial level of risk, and is not suitable for all investors. Please read the Risk Disclosure for Forex: https://www.schwab.com/resource/forex-risk-disclosure-statement.
Futures and forex accounts are not protected by the Securities Investor Protection Corporation (SIPC). Forex accounts do not receive a preference in any bankruptcy proceeding pursuant to Part 190 of the CFTC's regulations.
Read additional CFTC and NFA futures and forex public disclosures for Charles Schwab Futures and Forex LLC.
Futures, futures options, and forex trading services provided by Charles Schwab Futures and Forex LLC. Trading privileges subject to review and approval. Not all clients will qualify. Forex accounts are not available to residents of Ohio or Arizona.
The S&P 500® is a product of S&P Dow Jones Indices LLC or its affiliates ("SPDJI") and has been licensed for use by Charles Schwab & Co., Inc. Standard & Poor's® and S&P® are registered trademarks of Standard & Poor's Financial Services LLC ("S&P"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"). Charles Schwab & Co., Inc is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500.
The information here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment products and investment strategies mentioned are not suitable for everyone. Each investor needs to review each transaction for their own particular situation.
Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.
Investing involves risk, including, for some products, more than your initial investment.
Charles Schwab Futures and Forex LLC is a CFTC-registered Futures Commission Merchant and NFA Forex Dealer Member.
Charles Schwab Futures and Forex LLC (NFA Member) and Charles Schwab & Co., Inc. (Member SIPC) are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation.