Overnight Return
Categories: Trading
See: Overnight Trading.
It's not uncommon for a stock to close one day at one price, and then open the next session at a dramatically different price. The overnight return measures these changes. It's the percent difference from the opening price today versus the previous closing price.
You hold a stock of company that makes a boutique butt cream. On Monday, shares close at $12. On Monday night, it comes out that LeBron James uses the cream to help with his hemorrhoids. He's decided to become the company's spokesperson. Shares jump overnight. By the time it opens on Tuesday, the stock is trading at $15. That equates to an overnight return of 25%...a rise of $3 on a $12 stock.
