After-Hours Trading: An In-depth Guide to Extended Market Hours

Due to the illiquid after-hours market, the highest bid price from the sparse number of buyers is $240. She can either change her limit price to $240 to sell right away, or she can keep her original price and run the risk of a partial order or a not-filled order. At the end of the trading session at 8 p.m., all unexecuted orders are canceled. Normally, issuers make news announcements that may affect the price of their securities after regular market hours.

These price changes may or may not carry over into the next regular trading session, depending on investor sentiment and other market conditions. In either case, the opening price for a stock the next day may be quite different from the after-hours price of the previous day. Price volatility can be more pronounced during after-market trading due to lower volumes. You’ll first want to make sure you clearly understand how after-hours trading works and the risks involved in it. Your brokerage may ask that you meet with a investment representative to make sure you know the difficulties posed by after-hours and premarket trading.

Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance. Other services, such as Yahoo! Finance, will show the last trade made in the pre-market and after-hours markets. These services will usually cover all stocks, whether they trade on the NYSE, Nasdaq, or another exchange.

What Time Is Pre-Market and After-Hours Trading?

Make sure you read all the disclosure documents prepared by your brokerage firm before you start trading in the after-hours market. To make in-store Christmas shopping more convenient, the State tradesmarter: white label trading platform development Government has approved 35 extra trading hours for general retail shops in the Perth metropolitan area, beginning on Saturday, 7 December 2024. Sunday and public holiday trading has been extended an extra four hours a day, from 8am to 6pm (normally 11am to 5pm).

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There may be greater volatility 11 sectors of the stock market during extended or overnight hours than during regular market hours. As a result, your order may only be partially executed, or not at all, or you may receive an inferior price when engaging in trading during extended or overnight hours as compared to regular market hours. Additionally, stock prices can change from closing price because after-hours and pre-market traders may have access to information that regular-hour traders did not. Prices might rise or fall based on extended-hours trading and can carry forward to the next regular trading session.

Keep in mind that a limit order won’t execute if it can’t be filled at the limit price or better. After-hours might affect pre-market prices and volume based on the information that after-hours traders used to make trades. Both extended-hours sessions can affect regular-hours trading as well. However, very little activity occurs for most stocks so early in the morning unless there is news. The liquidity is also extremely thin, with most stocks only showing stub quotes. Trading during these hours can be risky due to the possible slippage from vast bid-ask spreads.

To trade stocks after hours, you need to have an account with a brokerage firm that offers after-hours trading. Not all brokerage firms offer this service; check with your broker to see if they provide after-hours trading. In addition, each brokerage firm that offers after-hours trading may have varying hours, so ensure you understand when after-hours trading is allowed. The ability to trade during extended hours can allow investors and traders to react instantly to the news which comes out when the exchange is closed. If a company reports poor earnings, the stock will likely drop, and the trader can exit their position sooner rather than wait for the exchange to open. If the system can’t find a match, the order will be canceled or held until regular trading hours.

If your brokerage doesn’t restrict them, consider them anyway as a means to protect yourself from unexpected price swings and order fills. After-hours trading is a period when investors and traders can buy and sell after the market closes. It is part of extended-hours trading, which is composed best currency pairs to trade of post-market and pre-market trading times. As extended trading has become increasingly popular over the past decade, many traders and investors have embraced it. In fact, several brokers now offer after-hours trading, including Charles Schwab and Fidelity.

1. If you don’t have a brokerage account or your broker doesn’t provide this service, several free sites give you access to pre-market and after-hours data.
2. By participating in both regular and after-hours markets, investors can diversify their approach, taking advantage of different market conditions and dynamics to optimize their portfolio performance.
3. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only.
4. In fact, several brokers now offer after-hours trading, including Charles Schwab and Fidelity.

Understanding Extended Trading

This causes wider bid-ask spreads and, in turn, greater stock price volatility. This is the challenging trading environment that can exist in after-hours trading. Most brokers require traders to enter limit orders during extended trading sessions. Over-the-counter securities, many types of funds, some options, and other markets may not be allowed during extended trading hours. Limit orders with preset limit prices placed during regular market hours will expire at the end of regular market hours.

Wider Bid-Ask Spreads

Some brokers allow you to enter orders from market close to pre-market open; the orders are queued until the pre-market opens at 4 a.m. It’s best suited for investors who are comfortable navigating a high-risk environment. If you’re considering this route, start with a modest investment—funds you can afford to lose. The offers that appear on this site are from companies that compensate us. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.