Traders and investors engage in after-hours trading for a variety of reasons. They may prefer trading with fewer market participants or their schedules may require it. They may want to take positions as a result of news that breaks after the close of the stock exchange.

Or, they may want to close out a position before they leave on vacation. Generally, after-hours trading refers to trading that takes place after normal market hours and up until about 8 pm. Premarket trading refers to trading that takes place before the start of normal market hours, generally from 7 a. until a. Together, after-hours trading and premarket trading are referred to as extended-hours trading. The precise times of extended-hours trading can depend on the ECN an investor uses or the financial institution where they place their orders.

For instance, Wells Fargo allows after-hours trading from p. ET until just 5 p. Electronic markets or ECNs used in after-hours trading automatically attempt to match up buy and sell orders. If they can do so, trades are completed. If they can't, trades remain unfilled.

After-hours trading typically only allows limit orders to buy, sell, or short, although a particular brokerage may be less restrictive. No stop, stop-limit, or orders with special instructions such as fill or kill or all or none are accepted. Moreover, orders are normally only good for the after-hours trading session in which they're placed.

The maximum share amount per order is 25, Quotes provided are limited to those available through the electronic market used. Investors may have access to other participating ECNs but it isn't guaranteed. In after-hours trading, the trading volume for a stock may spike on the initial release of news but most of the time thins out as the session progresses. The growth of volume generally slows significantly by 6 p.

So, there is a substantial risk that investors will be trading illiquid stocks after-hours. Not only does volume sometimes come at a premium in the after-hours trading sessions, so does price. It is not unusual for the spreads to be wide in the after-hours. The spread is the difference between the bid and the ask prices.

Due to fewer shares trading, the spread may be significantly wider than during the normal trading session. That's why certain investors and institutions may choose not to participate in after-hours trading , regardless of news or events. It's quite possible for a stock to fall sharply in the after hours only to rise once the regular trading session resumes the next day at a.

Many big institutional investors have a certain view of price action during after-hours trading sessions and express that view with their trades once the regular market re-opens. Since volume is thin and spreads are wide in after-hours trading, it is much easier to push prices higher or lower.

Fewer shares and trades are needed to make a substantial impact on a stock's price. That's why after-hours orders usually are restricted to limit orders.

If your brokerage doesn't restrict them, consider them anyway as a means to protect yourself from unexpected price swings and order fills. The ability to place trades and have them filled in trading sessions that occur after normal stock exchange business hours can be important to some traders and investors. After-hours trading offers certain advantages. Investors get the opportunity to trade on news that can move markets that's released after the market closes or before it opens, such as the monthly jobs report or earnings reports.

In addition, investors can take positions in response to unexpected events they believe may push prices higher or lower. After-hours trading may be an advantage to a dividend stock investor who misses the chance to buy a stock during regular market hours on the day before the ex-dividend date. The investor could try to buy it in after-hours trading in time to be eligible for the dividend.

For any number of reasons, traders and investors may seek to trade after hours. For example, they may be occupied from a. but still want to trade.

Or, it might be part of a trading strategy to either take or close out positions when participants are fewer. If the electronic communication network ECN that you're using for after-hours trading suddenly becomes unavailable for technical reasons, your broker may try to direct orders to other participating ECNs so that they can continue to be filled. If this isn't possible, a broker may find it necessary to cancel all orders entered for the after-hours session.

If you're considering after-hours trading, it's important that you understand the risks associated with it. Bear in mind, these are on top of the inherent risks of stock trading.

In fact, some brokerages require that investors accept the ECN user agreement and speak with their brokerage representative before they're allowed to trade, so that they fully grasp and accept those risks.

Here's a rundown:. Nvidia Corp. NVDA earnings results in February are an excellent example of the challenge of after-hours trading and the dangers that come with it. Nvidia reported quarterly results on Feb. As the chart shows, volume was steady in the first 10 minutes and then dropped quickly after p. However, volume slowed materially with just , shares trading between and However, the next morning was a different story.

From a. Sadly, nearly all of the after-hours gains made by investors during that session had evaporated. It certainly can. Since a great deal of trading may be taking place after hours, prices of securities can change from their levels when the regular market previously closed.

Yes, provided your brokerage authorizes you to do so. 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.

Lower trading volume and less liquidity results when fewer traders and investors are in the market. 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. After-hours trading of securities occurs after the close of the regular trading session at 4 p. ET and can last until about 8 p. Trader Offering. Investing Platforms. thinkorswim Trading Platforms. Mobile Trading Apps. Compare Platforms. Order Execution. Get in touch Call or visit a branch.

Go City, State, Zip. Commission-free online trading Applies to U. exchange-listed stocks, ETFs, and options. Learn more. Trade select securities 24 hours a day, 5 days a week.

Open new account. More trading hours, more potential market opportunities With news breaking overnight, today's highly connected world requires a way to react right when market moving events happen.

Trade on your schedule, not the market's 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. The list of available securities now includes FXI, SPY, EEM, GLD, SLV, DIA, UNG, TLT, IWM, QQQ, USO, SH, RWM, PSQ, AGG, DOG, EWA, EFA, EWJ, IJH, VTI, XLF, XLE, and XLK.

These securities were selected to provide access to a wide range of sectors. We are continuing to add additional securities to the list over time to provide broad market opportunities for access to global markets. Extended Hours Overnight EXTO orders are hour continuous orders that expire at 8 p.

ET every day. For example, an EXTO order placed at 2 a. ET Monday morning would be active immediately and remain active from then until 8 p. ET Monday night. A trade placed at 9 p. ET Monday night would be active immediately and remain active until 8 p.

ET Tuesday night. Trading after normal market hours comes with unique and additional risks, such as lower liquidity and higher price volatility. Your order may only be partially executed, or not at all.

Call us: With extended hours overnight trading, you can trade select securities whenever market-moving headlines break—24 hours a day, five days a week excluding market holidays. We've expanded our after-hours lineup to cover more international markets and sectors like tech, so you can access even more of the market around the clock. Check the background of TD Ameritrade on FINRA's BrokerCheck. Carefully consider the investment objectives, risks, charges and expenses before investing. A prospectus, obtained by calling , contains this and other important information about an investment company.

Read carefully before investing. All investments involve risks, including the loss of principal invested. Past performance of a security does not guarantee future results or success. Asset allocation and diversification do not eliminate the risk of experiencing investment losses. ETFs can entail risks similar to direct stock ownership, including market, sector, or industry risks.

Some ETFs may involve international risk, currency risk, commodity risk, leverage risk, credit risk and interest rate risk. Trading prices may not reflect the net asset value of the underlying securities. Commission fees typically apply. Taxes related to TD Ameritrade offers are your responsibility.

All Promotional items and cash received during the calendar year will be included on your consolidated Form Please consult a legal or tax advisor for the most recent changes to the U.

tax code and for rollover eligibility rules. TD Ameritrade was evaluated against 14 other online brokers in the StockBrokers. com Online Broker Review. Read the full article. This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.

TD Ameritrade, Inc. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. All rights reserved. Log in Open New Account. Trader Offering. Investing Platforms. thinkorswim Trading Platforms. Mobile Trading Apps. Compare Platforms. Order Execution. Get in touch Call or visit a branch. Go City, State, Zip. Commission-free online trading Applies to U.

exchange-listed stocks, ETFs, and options. Learn more. Trade select securities 24 hours a day, 5 days a week.

Open new account. More trading hours, more potential market opportunities With news breaking overnight, today's highly connected world requires a way to react right when market moving events happen. Trade on your schedule, not the market's 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. The list of available securities now includes FXI, SPY, EEM, GLD, SLV, DIA, UNG, TLT, IWM, QQQ, USO, SH, RWM, PSQ, AGG, DOG, EWA, EFA, EWJ, IJH, VTI, XLF, XLE, and XLK. These securities were selected to provide access to a wide range of sectors. We are continuing to add additional securities to the list over time to provide broad market opportunities for access to global markets. Extended Hours Overnight EXTO orders are hour continuous orders that expire at 8 p.

ET every day. For example, an EXTO order placed at 2 a. ET Monday morning would be active immediately and remain active from then until 8 p. ET Monday night. A trade placed at 9 p. ET Monday night would be active immediately and remain active until 8 p. ET Tuesday night. Trading after normal market hours comes with unique and additional risks, such as lower liquidity and higher price volatility.

Your order may only be partially executed, or not at all. Get started now Open an account and select that you plan to actively trade during the sign up process.

Log into thinkorswim and select EXTO when placing an after-hours trade. open and close button.

Similarly, a branch of the Swiss multinational investment bank, UBS Group AG, in Bangkok will have a lower transaction volume in the Forex market compared to its branch located in a major Asian financial hub like Singapore. Use GMT Time. Yes, provided your brokerage authorizes you to do so. Trade select securities 24 hours a day, 5 days a week. Read carefully before investing.

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