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Every day, the United States Stock Market is open for business for just over six hours--typically from around 9:30 a.m. to around 4 p.m. or so, eastern standard time.
During this time, the stock market is extremely busy, bringing in huge crowds and thousands of investors and financial experts from the moment the first bell rings. If you've ever seen a photo of the stock market building you know it's a very crowded place during business hours.
But lately, some investors are discovering a more relaxed and less hectic place in which to do their trading--the pre-market and after-hours stock trading times.
It's true--it is now possible to complete your trades before the market even opens in the morning, and if you prefer to work later, you may do so after the market closes for the night. There are some different parameters for after hours trading that you should be aware of, but we'll get to those in a moment.
First some basics about after-hours trading--typically it is done during times that the regular stock market is closed. For example, in the afternoon trading usually occurs between 4-8 p.m. eastern standard time.
So, why would anyone want to even do this in the first place?
Chris Concannon, Executive Vice President in the Transaction Services Group at NASDAQ, put explained it this way: "Many companies report earnings either before the market opens or after the market closes. The intrinsic value of a stock is constantly moving whether the market is open or not, and people want to access the market when the intrinsic value is changing."
Although any type of investing is inherently risky, no matter what time of day you do it, the Securities and Exchange Commission has listed some of the more common risks to be aware of if you decide to trade stocks after-hours. For example, you may not be able to see or act upon quotes due to some companies only allowing stock investors to see the quotes from one single trading system the firm normally uses for after-hours trading.
Also, during normal hours, it is often easier to trade with others because more people are around doing it. Ask your broker which quotes you will be able to see during after-hours trading. |