What is Overnight Trading in Stock Market?

The Securities and Exchanges Board of India (SEBI) allows you to invest in assets or securities after the markets are closed. These investments take place outside of regular trading hours and are called after-market orders (AMOs) that come with the residual maturity of a day.

Overnight trading, as the name suggests, is a type of trading in which you can purchase assets or securities after markets close and through the night before the markets reopen the next morning.

For those of you, who don’t have the time to track the stock exchanges during the market hours, overnight trading is a good solution. It gives you the flexibility to trade in stocks and commodities after market hours before the exchanges open at 9 a.m. Overnight trading is also ideal for those residing outside India and interested in trading back home.

What is overnight trading?

Buying or selling of equity derivatives or commodities anytime after the market is closed until the market reopens the next day, is called overnight trading or after-market order.

But why should you indulge in overnight trading when you can trade during the market hours? Here’s an example: You have 10 shares of ABC with you. Over the day, you see a positive trend in the prices. Now, you know that your stock’s price will open at a high the next morning and you may want to sell as soon as the markets open. But you have a meeting at 9 a.m. You can place an AMO to sell your 10 stocks as soon as the markets reopen.

This is one of the many scenarios in which you can take part in overnight trading. For example, you are expecting a substantial change in the market following a significant global event in the night. Place an AMO for the next morning to avoid last-minute hassles.

What are the overnight trading hours?

In India, there are two major stock exchanges: the BSE and National Stock Exchange of India.

For equity trading, the overnight trading hours are from 3:45 p.m. to 8:59 a.m. for BSE. The overnight trading hours for NSE are from 3:45 p.m. to 8:57 a.m.

For currency trading, you can place an AMO between 3:45 p.m. and 8:59 a.m. For trading derivatives such as future and options (commonly known as F&O), the overnight trading hours are between 3:45 p.m. and 9:10 a.m.

How to place an overnight trading order?

The process for placing an AMO is the same as any other order. Log on to your Demat account on Angel One using your registered credentials. Click here to get started.

Go ahead and place your order for buying, selling, delivering or receiving securities or commodities. Make sure to click on the AMO option. We will take your order and push it to the stock market as soon as the market opens.

What are the benefits of overnight trading?

One of the critical benefits of overnight trading is the ease of trading at your own pace, irrespective of market timings. Especially, if you are a working professional, and do not have the leisure to follow market trends through the day, overnight trading gives you a chance to trade at your convenience. Some other benefits of overnight trading include:

1. Overnight trading allows you to analyse market behaviour through the day and make an informed decision.

2. While overnight trading may get you a profit on your stocks the following day, it will also allow you to cut your losses in a losing stock.

3. You are at liberty to modify or cancel your overnight order, in case you decide not to go through with the order.

Keep these in mind for overnight trading

While overnight trading is convenient, it comes with a few risks. For instance, you may be expecting a rising stock to open well the next day and increase your profits. However, a significant development overnight may turn your profit into a loss.

You can only place a market order or a limit order during overnight trading. Meaning, it is an order that sets a limit on the price of the stock. This includes the price you have to pay to buy a share or on the price at which you can sell your stock. So, if the share doesn’t reach the price at which you placed the order, your order will not be executed.

Moreover, while AMO allows you to cancel or modify your order, you cannot limit your losses. Stop-loss orders, which help curtail your loss, are not applicable on overnight trading. So, you cannot place an AMO with a stop-loss order that the order is placed only when the stock prices drop below a certain amount.

Yet another pointer to keep in mind is that when a company issues its financial statement, or any economic data is released, the price gap shoots up during non-market hours as there is very little liquidity. This could impact your AMO adversely.


Overnight trading is an investment tool that lets you trade after market hours. It is convenient for those who do not have the time to study the market during the day.

However, the process entails risks. So, if you are planning to get in on the leverage that overnight trading provides you, factor in the risks. Use the tool wisely.