Online Stock Trading – Extended Trading Hours Secrets

london stock exchange trading hours

Stock Exchange Trading Hours – A friend of mine recently asked my how it is possible that some stock prices still vary though the stock market closed already. The answer lies in extended trading hours.

Extended trading hours are much different than the ordinary trading hours. There are more rules and if you want to participate you have got to know them. First of all, just because the regular trading hours are over it does not mean that there may be no other trades.

But where do these trades take place? Extended trading hours are usually for academic traders but you can place an order as well as your broker supports it. Most modern online brokers do nowadays.

You can often place trades and get executed until 7pm or 8pm EST. But it all relies on the volume and liquidity at this point. One thing is critical. There are more rules and the liquidity is usually much lower than during regular trading hours.

If your broker takes orders you’ll have to set limit orders. Chances are high that you only get a partial fill or not filled at all. Or you get a wierd lot. This means higher risk that you probably can not exit the trade when you want.

Another problem with after hours trading is the wider spreads. Because of the lower liquidity the spreads start to widen. This suggests heftier costs and higher risks for you.

Since private backers are infrequently participating, you may vie with professional traders. This may also mean a higher risk to you.

Why would somebody wish to trade after-hours? There are good opportunities after hours as long as you do. Corporations do report takings or important news after hours as an instance. This gives you an opportunity to react on the news and get in or out of a stock while other financiers are still waiting for the following trading day to start. Many traders enter after hours and exit the following day before the market opens. They made a profit before others even start trading.