May 26, 0 Comments. Stock exchanges, like the London Stock Exchange, New York Stock Exchange, NASDAQ, and others, all have set trading hours during which they are open for business.

Did you know, though, that you can trade stock after hours as well? The London Stock Exchange, for example, is open for business from 8: The vast majority of all trading goes on during this time, from the opening bell to close.

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Have you ever noticed how a stock can close at, say, Part of this is due to after hours trading. Also known as extended hours trading , after hours trading is a time period following the official close of the market. For the NYSE, for example, after hours trading is from 4: You can buy and sell like you normally would during ordinary operating hours, but volume is generally lower and price movements may be more volatile than they otherwise would be.

Before the Information Age, you could only trade after hours typically if you were an institution or had considerable means. Now, though, you can trade through something called an electronic communication network , or ECN. An ECN is basically a private, computer-based system to buy and sell stocks outside of a stock exchange. You can also sell other asset classes. To gain access to an ECN, you have to have an account with a brokerage that allows direct access to the ECN.

You will also have to pay fees, which vary depending on the system you are using and whether or not you are a liquidity provider or liquidity remover.

You remove liquidity when you place an order that can be immediately executed. Some ECNs pay liquid providers and charge liquidity removers, while other ECNs charge flat fees for all traders. Trading after hours gives you the ability to extend your trading day and try to take advantage of news items, events, report releases, or any other circumstance that could move the price of a stock.

You can also use extended hours trading to take advantage of what goes on in other markets in different time zones, since that can impact your company.

Another common reason is the opportunity to jump on price fluctuations and take advantage of spreads that might be in your favor. You can sometimes find very favorable prices. One tactic you could try is to look for a stock that took a big hit during the day.

Depending on the circumstances, it can rally after hours — meaning you have an opportunity to profit off its rebound. Extended hours trading carries with it several risks.

The Guide to After Hours Stock Trading | WiseStockBuyer

The main risk is volatility. Trading after hours, believe it or not, can move quickly, and the ups and downs can be dramatic.

Then again, neither is any kind of short-term trading for that matter. After hours trading can help you take advantage of more trading time, price swings, and late-breaking news. It can also hurt your pocketbook, too. Be mindful of the risks if you choose to trade after hours. You can use these tags: Currently you have JavaScript disabled.

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OptionsXpress Review Alternative Investments About. All About After Hours Stock Trading May 26, 0 Comments Tweet Tweet Stock exchanges, like the London Stock Exchange, New York Stock Exchange, NASDAQ, and others, all have set trading hours during which they are open for business.

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