Can I Trade After Hours with Merrill Edge?

Can I Trade After Hours with Merrill Edge?

The U.S. stock market’s regular trading session lasts six and a half hours. However, after-hours trading could add four additional hours to the day, and trading during these extended hours differs from trading during regular hours. The question now is, can one trade after hours on Merrill Edge?

Merrill Edge offers after-hours trading. Customers are allowed to trade after-hours from Monday to Friday from 4:01 p.m. until 8:00 p.m. ET.

In this post, we’re going to take a look at the trading hours – both regular and extended – at Merrill Edge and whether or not there are surcharges associated with extended-hours trading. Furthermore, I’ll discuss the merit of after-hours trading, as well as the risks and drawbacks that come with it.

What Time Does Merrill Edge Start Trading?

Merrill Edge starts trading by 7:00 a.m. ET. This time marks the beginning of the pre-market session, which ends at 9:30 a.m. ET. Even though Merrill Edge accepts orders as early as 7:00 a.m., the orders aren’t delivered to the electronic communications network (ECN) until 8:00 a.m.

Except on days when the market is closed, the regular trading schedule on Merrill Edge runs from 9:30 a.m. to 4:00 p.m. ET, Monday through Friday.

Are There Extended Hours of Trading at Merrill Edge?

Merrill Edge offers extended-hours trading after you must have agreed to an extended-hours document. You can then purchase and sell securities before and after the regular trading period – the pre-market and after-hours sessions. However, you are also limited to trading 100,000 shares per order during these sessions.

Listed firms in the US are known to release earnings reports outside of regular market hours, so trading during extended hours can be pretty profitable. You can place a trade to sell or purchase more securities before the stock price changes substantially in case an unexpected announcement is made. Also, the pre-market and after-hours trading extend the period investors can trade during the day.

Note: Orders placed during the pre-market or after-hours period are not carried over to the next trading session. If an order is not filled during the pre-market session, it will be automatically canceled at the end of the session and will not be available during regular or after-hours sessions.

Does Merrill Edge Impose Surcharges for After-Hours Trading?

There are no charges for trading during the after-hours session at Merrill Edge.

During the after-hours session, some brokerage firms may impose a fee for purchasing and selling securities. Merrill Edge, however, charges no commission on shares. As well, customers with at least $20,000 in total account balances with Bank of America are eligible for free trades at Merrill Edge.

What Is the Merit of After-Hours Trading?

Extended trading hours offer investors the chance to adjust to developments proactively. If you choose to participate in after-hours trading, it’s important to understand and be informed about it because it influences regular trading hours. Trading outside of normal trading hours allows you to carry out trades based on significant news events, the futures market, economic reports, and earnings reports.

Speaking of earning reports, quarterly earnings reports are usually released before or after the market opens for regular trading. Thus, as a trader, you can react quickly based on the information you gather from these earning releases when you trade after hours.

After-Hours Trading on Merrill Edge – Is It Worth It?

While after-hours trading may appear to be a great opportunity, it is not without risks. Compared to normal trading hours, after-hours trading comes with more risks. Consider the following risks associated with after-hours trading before you trade during that period.

  1. Lack of Liquidity: One of the most serious concerns with after-hours trading is the lack of liquidity. There is often less trading volume during extended hours since there are fewer investors that place trades. As a result, trading may become more difficult. There will also be a higher spread between the offer and selling prices due to the lower trading volume. Therefore, if you trade during the after-hours session, you might not get a reasonable price compared to trading during regular hours.
  2. Volatile Prices: Prices tend to fluctuate and become unpredictable during extended-hours trading. The volatility in price during the after-hours period is because of the lesser trading activities than during regular trading hours. There’s also the likelihood of price uncertainty. A stock’s price during after-hours trading may differ from its price during regular trading hours.
  3. Competition: Highly experienced investors from large corporations make up a significant proportion of those that trade during after-hours. Individual investors may be at a disadvantage because these experts often have more knowledge and expertise than the average investor. Professional investors also know what moves to make from the information they get from earnings and economic reports.

Even if you believe extended hours trading is worth the possible risks, you may encounter problems due to the restrictions imposed on it. The rules governing after-hours trading depend on the broker and the ECN.

ECNs are a form of alternative trading technology that allows investors to trade outside the traditional stock exchange. An ECN generally does not allow individual investors to trade directly with it. Instead, only subscribers, which include broker-dealers and institutional traders, are allowed to place trades on an ECN. An individual, therefore, must employ a broker-dealer subscriber to place a trade.

The ECN processes orders sent during Merrill Edge’s extended hours. While trading on an ECN, Merrill Edge warns its customers that software issues or other communication faults may arise. As a result, the risks in trading are higher during after-hours than during regular trading hours.

Conclusion

As we have established, trading after-hours provides investors with the opportunity to react quickly to events, and Merrill Edge does not deprive its customers of these benefits. On Merrill Edge, you can always trade from 4:01 p.m. until 8:00 p.m. ET on days when the market is open.

Nonetheless, it would help if you had enough expertise in after-hours trading to acknowledge and appreciate the risks involved before you place a trade during such sessions. You should also be knowledgeable enough about earnings and economic reports, and the futures market to adjust appropriately to abrupt changes.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

2) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

3) If you are interested in crypto, check out Gemini. I've started allocating a small amount of assets to the growing crypto space and Gemini has just been a breeze to use. Once you register, make sure to also open an Active Trader account to buy crypto at the lowest fees on the market (just 0.03%!).

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Latest posts by Marvin Allen (see all)

Leave a Reply