Holding period

Two measurements share the name. One is clock time between the opening and closing fills, which is what a trade report shows. The other is the number of daily cut-offs the position was open across, which is what determines cost, because overnight financing is applied per cut-off and not per hour. A position opened minutes before the cut-off and closed minutes after it is a few minutes old by the first measure and has carried a full financing line by the second.

The familiar style labels are bands on this measure and nothing more. Scalping describes seconds to minutes, day trading describes positions closed before the session ends, swing trading describes days to weeks, and position trading describes months. The boundaries are conventional, they overlap, and no authority fixes them, so the same position is described differently by two desks without either being wrong.

What changes with the holding period is the shape of the cost, not just its size. Spread and commission are paid once on the way in and once on the way out whatever the duration, so they dominate a short holding period entirely. Financing accrues per cut-off and dominates a long one, and it does not accrue evenly: under the common spot foreign exchange convention one night of the week carries three times the usual amount, because that night's settlement date rolls across the weekend. Comparing two cost structures therefore requires a stated holding period, since a comparison made without one is measuring two different things.