Futures For You by Carley Garner
As a futures trader, should I place stop
orders in the electronic overnight markets
or only in the day session?
This is a personal preference and the
decision should be made independently
for each market. Several years ago,
overnight sessions were extremely thin
and often resulted in stops being triggered
that arguably shouldn’t have been.
However, as the electronic markets have
become more popular and trading increasingly
global, the liquidity in the
overnight sessions has picked up dramatically
in most markets. The volume
improvements make working stop orders
overnight much more attractive.
In my opinion, stop orders should be
placed in the overnight session for most
markets. With the exception of the CME
meat markets, the overnight markets
have become relatively fluid and in
doing so may avoid slippage due to
gaps on the day session charts resulting
from large overnight moves.
With that said, it is important to realize
that some markets don’t give you a
choice and others make it extremely
inconvenient to do so. In the case of the
CME currencies, all orders are placed
on their Globex electronic platform.
This means that a good till canceled
(GTC) order will work around the clock,
except when the market is closed. Due
to the nature of the currency market,
however, this makes sense. Currency
trading is so global it is not uncommon
for prices to move more when many of
us are in bed than otherwise.