- By CFD Trading
- 2025-10-27 07:52
What Are the Risks of Holding Positions Over the Weekend in Prop Trading?
Imagine waking up Monday morning ready to jump into the markets — only to find your weekend trading decisions hit you with surprises you weren’t prepared for. That’s the reality for many prop traders who keep positions open through the weekend, risking it all for that fleeting chance of extra profit. But is it worth it? Let’s dig into what makes weekend holds both tempting and dangerous in the world of proprietary trading.
Why Prop Traders Tackle Weekend Positions
In the fast-paced realm of prop trading, the allure of squeezing out every dime from market swings doesn’t stop when the markets close. Especially with the dizzying array of assets—from forex, stocks, and commodities to crypto, indices, and options—there’s always a chance that gains can pile up after hours. Traders sometimes hold positions over the weekend, betting on upcoming events, earnings reports, or geopolitical twists to give their trades that extra edge. But while it sounds like a wise move in theory, there are plenty of pitfalls lurking behind these weekend strategies.
The Hidden Dangers of Weekend Trading
Gaps and Slippage
One of the biggest headaches comes in the form of gaps — sudden jumps or drops in prices when the market reopens. Unlike during regular hours, where you might be able to execute a trade at your preferred price, gaps can cause orders to execute at much worse levels. Think of it like planning a road trip and hitting a surprise roadblock during a detour; what looked like a smooth ride can suddenly turn into a detour with hefty costs.
Increased Volatility
Markets often react wildly over the weekend, spurred by news, political developments, or unexpected global events. Crypto markets, for example, are notorious for extreme swings when trading resumes, making holding positions over a weekend akin to riding a roller coaster with no seatbelt. For traders who aren’t ready for the wild ride, this unpredictability can wipe out weeks of gains overnight.
Lack of Liquidity
When the markets are closed, liquidity dries up, making it harder to unload positions or account for rapid price shifts. You might find yourself unable to close trades at desired levels, especially in more obscure assets like certain altcoins or niche futures contracts, risking significant slippage or holding onto losing positions longer than intended.
Overnight News Risks
Major geopolitical developments or economic announcements often come out during weekends when news breaks suddenly. These events can trigger sharp moves when the markets reopen, catching traders unprepared and resulting in losses that could have been avoided by closing positions beforehand.
A closer look: Classic case study
Take a hypothetical trader who’s riding a hot streak in stock options. Deciding to hold over the weekend, they wake up Monday to find a sudden geopolitical scare causing a market plunge. Their options are now worth a fraction of what they were 48 hours ago. The trader’s assumption that their position would stay safe through the weekend turned out to be a costly gamble.
Smart Strategies for Weekend Trading Risks
- Set Stop-Loss Orders Carefully: Lock in your downside before the market closes, especially if holding volatile assets. But remember that stop orders may not always fill at exact prices during gaps.
- Monitor Global Events: Stay plugged into a news feed — knowing what’s happening worldwide can help you decide whether to close out or hold.
- Position Size Cautiously: Larger positions mean bigger risks. Keep your exposure manageable so a gap or jump doesn’t wipe you out.
- Utilize Hedging: Pair risky assets with hedges (like options) to protect against unwanted overnight moves.
- Avoid Overconfidence: Remember, even the best traders can misjudge how markets will react after hours.
The Future of Prop Trading: Trends, Challenges, and Opportunities
As decentralized finance (DeFi) and AI-driven trading evolve, the game of holding positions over weekends is entering new territory. Automated smart contracts can execute trades at lightning speed, reducing human emotional errors and reacting instantaneously to market shifts. However, reliance on technology also brings new risks — smart contract bugs, hacking, and network outages.
Prop trading, especially across multiple assets—forex, stocks, crypto, commodities—is becoming more complex but also more sophisticated. Traders are integrating AI tools to analyze data patterns and make real-time decisions, diminishing some risks of holding over the weekend. Still, as markets get more interconnected and automated, the potential for systemic shocks grows.
The road ahead? It’s about striking a balance: leveraging cutting-edge tech to stay ahead while maintaining a cautious approach to holding over the weekend. Staying flexible, informed, and prepared can turn weekend risks into weekend rewards.
Final word: Should you hold or fold?
In the end, it’s a personal odds game. Holding over the weekend could boost your gains— IF you’re prepared for the volatility, gaps, and unexpected news. It’s a strategic decision, not a gamble. As the industry points toward AI-driven trade execution, decentralized finance innovations, and smarter risk tools, navigating weekend risks will become even more about smart strategy than sheer luck.
Because in prop trading, the best move isn’t just chasing profit—it’s knowing when to step back and let the market breathe.