If you’ve been futures trading for any length of time, you’ve likely had that strange, stomach-sinking feeling when the markets open Sunday night and the price isn’t where you put it Friday. That’s called a weekend gap—and it can be your best friend or worst enemy, depending on how you approach it.
For prop traders, weekend gaps aren’t abstract anomalies of the market—they’re pieces of a larger risk and opportunity puzzle. As most funded accounts have strict rules regarding risk, drawdown, and discipline, knowing how gaps are created and how to manage them might literally make or break your prop firm experience.
Let’s discuss what weekend gaps are, why they occur, and—most importantly—what prop traders need to be doing about them. We’ll also mention futures trading hours and how that comes into gap risks, and provide you with some information about the best prop firms for futures if you’re trading with funding support behind you.
First Things First: What’s a Weekend Gap?
A weekend gap is very simple. Futures markets actually close on Friday night and open on Sunday night (the actual futures trading hours are a few minutes different depending on the contract). While that downtime happens, news doesn’t cease, and neither do world events.
When the market opens, prices occasionally gyrate or plummet from Friday’s close, creating a gap on the chart. For instance:
- Suppose the S&P 500 futures closed Friday at 5000.
- At the weekend, sudden news emerges—a geopolitical blip, a central bank statement, or even simply strong market sentiment growing elsewhere.
Sunday night, the futures market opens at 5020. Boom—a 20-point gap up.
That 20-point disparity? That’s the weekend gap. It’s sometimes tiny, sometimes huge. And as a prop trader, you can’t take it lying down.
Why Weekend Gaps Occur
Weekend breaks aren’t arbitrary; they often come as a result of news the market didn’t have time to absorb before the close. Some of the frequent offenders are:
Geopolitical Incidents – Wars, peace agreements, political unrest, elections–take your pick. Markets abhor uncertainty, and any big news can rattle sentiment quickly.
- Economic News Overseas – Don’t forget, the U.S. may be sleeping, but Europe and Asia aren’t. China putting out unexpected trade figures or Europe signaling a policy shift can cause futures to shift on Sunday evening.
- Company News or Earnings – As long as futures are bound to broader indices or commodities, major firms that hit the headlines have the power to sway sentiment in one direction or another.
- Natural Disasters or Pandemics – All of us witnessed this in play in 2020. Weekend-unfriendly events don’t care about the weekend, and when they strike, futures gaps can be merciless.
- Market Positioning – Oftentimes, it’s not even news but positioning by traders for the new week. If the market was significantly biased one way, then a corrective gap may open up.
Why Weekend Gaps Matter More for Prop Traders
If you’re trading in your own account, weekend gaps can hurt, but you can decide to ride it out. In a prop firm, however, things are stricter. You can’t simply “hope it comes back” if your trade gets absolutely killed at the open.
Here’s why gaps matter particularly for funded traders:
- Drawdown Rules – The majority of best prop firms for futures have limited daily and total drawdowns. A losing gap against you can clean out your account within seconds, before you even execute a trade.
- Overnight & Weekend Holding Restrictions – A few firms prohibit you from holding futures positions over the weekend. If you do hold them, you’re jeopardizing disqualification before Monday even begins.
- Psychological Pressure – Having a gap can kill your account and adds extra mental stress. Prop firms already challenge discipline; gaps raise that challenge to another level.
- Opportunity Cost – Conversely, gaps can also be opportunities. If you have prepared well, you may pick up on a favorable move at the point of opening. Once again, discipline is paramount.
Strategies for Dealing with Weekend Gaps as a Prop Trader
Obey Your Firm’s Rules
This may seem simple-minded, but it’s worth saying twice: if your prop firm has a rule against weekend holding, don’t try to push the envelope. You’ll get no prize for courage—you’ll just get disqualified.
Close Positions Before Friday’s Closing
If you’re not 100% confident in a trade, it’s better to close out before the weekend. Don’t gamble on “hoping” the gap goes your way. Prop trading isn’t about hope—it’s about consistency.
Watch the News Flow
Keep an eye on upcoming events. Is the Fed chair giving a speech on Saturday? Is there a big election overseas? Knowing the calendar can help you predict when a gap is more likely.
Use Small Size for Weekend Exposure
If your firm allows weekend holding, consider scaling down your positions. Smaller size means less risk if the gap moves against you.
Build a Gap Playbook
Some traders actually specialize in trading gaps. They track how often gaps fill (meaning price retraces back to the Friday close) and develop strategies around that. If you’re disciplined, this could be a profitable angle.
Remain Calm on Sunday Open
When the futures open on Sunday night, volatility tends to be crazy. Don’t rush in. Sometimes the best move is to sit through the first 15–30 minutes and let things calm down.
