Index and gold CFDs take a daily break, and the platform doesn't always say so

[Shadow Trader]

Many brokers pause trading on index CFDs and metals for about an hour each day, commonly around 5pm New York time, when the underlying futures market closes for maintenance. Quotes vanish, the chart flatlines, and orders can't be placed.

The surprise comes at the reopening. Prices can gap from the last quote before the break. Stops placed during the pause don't execute, and a position held through it can reopen well away from where it went quiet. Spreads at the reopening are wide for several minutes, and some brokers apply different rules to pending orders during the break.

Break times vary by instrument and shift with daylight saving. US indices, German indices and gold don't all pause at the same moment, and the schedule changes in the weeks when US and European clocks are out of step.

The contract specifications list the exact trading hours for each symbol. Reading them once and writing the times down in the correct time zone avoids unpleasant discoveries.

A related habit worth building is checking whether the broker's break lines up with the rollover window for forex pairs, since both can pile onto the same few minutes and make that stretch particularly messy.

Scalpers who trade gold or indices alongside forex sometimes forget that the pause applies only to the CFDs, and keep expecting to close a position on a screen that has stopped updating.

Has a position ever been caught on the wrong side of a daily trading break?