Brokers offering after hours trading
With news breaking overnight, today's highly connected world requires a way to react right when market moving events happen. Regular market hours overlap with your busiest hours of the day. Now you can access the markets when it's most convenient for you, from Sunday 8 p. ET to Friday 8 p. These securities were selected to provide access to a wide range of sectors. We intend to add other securities to the list over time. For example, an EXTO order placed at 2 a. ET Monday morning would be active immediately and remain active from then until 8 p.
A trade placed at 9 p. ET Monday night would be active immediately and remain active until 8 p. Trading after normal market hours comes with unique and additional risks, such as lower liquidity and higher price volatility. Most major online stock brokers such as TD Ameritrade, Fidelity, and Vanguard will allow you to place trade orders to be executed during extended hours.
Some may charge and additional fee for the service. You will have to check with your broker for details. After-hours trading carries some big risks. Read on before starting to trade during extended-hours yourself. Lower liquidity means there are fewer buyers and sellers and a lower trading volume during AHT. This makes it harder to convert shares into cash.
Lower liquidity also results in a wider spread between the bid and the asking price. In practice this means it will be harder to have a trade executed as a favorable price. You will have to move farther from your bid price in order to secure a trade. Large institutional investors make up the majority buyers and sellers in the extended-hours market.
Although extended-hours trading is now an option for all investors, even small fish, the reality is that the AHT market is mostly made up of large investors.
These large institutional investors have access to more resources than most investors. This is the same risk day-traders and small independent investors face on a daily basis, but the effects are more exaggerated in the AHT market. Higher volatility also results due to the low trading volume compared to during the day session.
Because there are fewer trades happening, you are more likely to experience large, unexpected price shifts than during normal trading hours. News Announcements such as earnings reports are usually released after the day session ends. US Employment Reports are released early before markets open.
This news can have large, unexpected effects on a stocks price especially when combined with the effects of lower liquidity and higher volatility as described above. After-hours trading is not for the faint of heart. The risks are real but the advantage is that you can make trades based on new information without waiting until the markets reopen.