Overnight Limit
Categories: Trading
By and large, the currency market runs 'round the clock. It closes for a period of time on the weekend, but thanks to time zones, there are financial markets open all the time.
However, there's still an overnight period in currency trading. Any deal still open at 5 pm EST is considered an overnight position. Too many of these can get dangerous for the market though. While regulators and banking officials sleep, something terrible could happen, turning all those overnight positions sour.
So there are limits. As you've probably guessed by now, those controls represent the overnight limit. These can be set relatively locally (like by your specific forex broker), or they can come from the highest regulatory levels (like a central bank or treasury directive).
