Extended Hours Trading
Extended Hours Trading specifically refers to stock trading outside Wall Street's traditional trading hours of 9:30am to 4pm EST. An Extended Hours order may be placed and executed on one of the Electronic Communications Networks (ECNs). Extended Hours investing involves unique risks that investors should fully understand before placing an order after hours. These risks include, but are not limited to, greater price volatility, less liquidity, and wider bid/ask spreads than during regular market hours. Prior to participating in this unique Extended Hours session, you should review and be aware of the various risks and requirements involved in Extended Hours Trading. While trading in the Extended Hours sessions is not new, in the past it has been a mostly institutional market with institutional traders working primarily on behalf of banks, insurance companies, mutual funds and pension funds.
Eligible Securities/Order Types
Placing a Trade
Extended hours trades must be placed as a limit order. Due to the illiquid nature of extended hours markets, market orders are not accepted.
Extended hours trading sessions are:
(Times in EST)
Pre-Market 8:00AM – 9:28AM
Post Market 4:00PM – 6:00PM
Pre-Market and Regular 8:00AM – 4:00PM
Regular and Post 9:30AM – 6:00PM
All Sessions 8:00AM – 6:00PM
Regular 9:30AM – 4:00PM
Nature of Extended Hours Trading
Most ECN's only allow customers to enter limit orders, meaning they will only accept orders to buy and sell at a specific price. If a trade can't be consummated at that price, the order will expire unfilled. Essentially, the ECN systems simply list orders to buy and sell, and when they detect a match, the system automatically executes the trades. Regardless of whether or not a particular ECN allows market orders or sticks to limit orders only, it is good practice for investors to place only limit orders, thus protecting themselves somewhat from the wide price swings that might occur in the Pre and Post-trading sessions, when trading volume is lower.