Overnight inventory
Overnight inventory is a Market Profile measure of how the overnight session traded relative to the prior day's settlement: if most of the overnight activity was above the settlement, the overnight inventory is net long; if most was below, net short; if all of it was on one side, 100% net long or short. An extreme inventory is read as a greater chance of an early correction after the regular open.
Senzoukria · Glossary · Updated September 2026
Definition
Shadow Trader's glossary describes overnight inventory as a way of measuring overnight activity in the futures market by noting how much of it falls above the prior day's settlement. More activity above means net long, more below means net short, and all of it above or below means 100% net long or 100% net short. The idea is that overnight participants have built a position in that direction, and that the regular session will either confirm it or force them to unwind it.
Why an extreme inventory matters
The same source notes that the overnight inventory matters most in early trade when it is skewed 100% in one direction, because the odds of an early correction increase, and it attributes this to overnight traders reversing quickly when the regular session does not confirm their bias. The correction, often called an inventory correction, is a move back toward the prior settlement in the first part of the session. It is a tendency described by practitioners, not a rule, and it can be overwhelmed by news at the open.
A worked example
The prior settlement is 5,000.00. Overnight, price trades between 4,998.00 and 5,012.00, with the great majority of time and volume above 5,000.00: the inventory is net long. Had the overnight low held at 5,001.00, it would have been 100% net long. At the regular open, the first question is whether early selling pushes price back toward 5,000.00, the correction, and whether buyers absorb that selling above it. The footprint and the tape at the open answer that question better than the label.
In Senzoukria
There is no inventory calculator; the reading is assembled from session tools. The Overnight High/Low overlay draws the extremes of the bars between the 17:00 Chicago session open and the regular open, set in minutes after 17:00 (930 by default, which is 8:30), and projects them on the rest of the session; it only appears when the session has bars on both sides of that boundary. The Prior Session H/L/C overlay projects the previous session's high, low and close, where the close is the last bar of that session as loaded, not the exchange's official settlement price, so the settlement itself has to be taken from the exchange. The Market Profile (TPO) overlay's 'Sessions NY / London / Asia' period shows how the overnight value was built relative to the New York session.
Related
- ETH (extended hours)
- Overnight high / low
- Overnight High/Low indicator
- Prior session levels
- Market Profile open types
- Named sessions
In the same section
- Overnight position rule
- Overtrading
- Overfitting
- P-shaped profile
- Outcome bias
- p-value
- Out of the money
- Paper trading
Sources
- Shadow Trader glossary: overnight inventory (2026-09-25)
This page in other languages
Frequently asked questions
- Why use the settlement rather than the previous close?
- The settlement is the official price at which positions are marked each day, and overnight traders' profit and loss is measured against it. A chart's last traded price for the session can differ from the settlement, so using the exchange's settlement keeps the measure consistent with how positions are actually valued.
- Does a net long overnight inventory mean the market will fall at the open?
- No. It means overnight activity was mostly above settlement. Practitioners watch for a correction early in the session, especially when the inventory is 100% on one side, but the regular session can just as well accept the overnight prices and extend them.