What is the primary advantage of overnight trading?

The primary advantage of overnight trading is the ability to respond to news after market closure. This is significant because many important developments, including earnings reports, economic indicators, and geopolitical events, can occur outside regular trading hours. Traders who participate in overnight trading can adjust their positions based on this new information, allowing for rapid responsiveness to market-moving news that might influence stock prices when the market reopens.

Being able to react promptly to developments can help traders capitalize on price movements before they stabilize during standard trading hours, thus potentially enhancing their trading strategy and performance. This aspect of overnight trading is crucial for market participants aiming to leverage timely information for better trading outcomes.