Vanguard is a well-known broker that is popular with long term investors. Whilst the platform itself leaves something to be desired, one bonus of using Vanguard for trading is that it offers after-hours trading.
With a Vanguard Brokerage Account, after-hours trading is available from 04:00 p.m. to 05:30 p.m. ET. On days when the exchanges close early or when trading is halted trading after hours may not be possible.
Before using Vanguard for after-hours trading, there are a few things you should be aware of. Understanding the basics of after-hours trading is a good start. Make sure you understand that trading outside of normal market hours can have both benefits and drawbacks.
What are the benefits of trading after hours on Vanguard?
Extended trading hours allow you to act quickly on news that can affect stocks during
times the market is closed. Being able to do so can help you get a good price on a stock
that is due to change at market opening.
- Discounted stock price: By trading after hours you can sometimes get a great deal on a stock price that you otherwise would you would have to wait to act upon until the market opens.
- No extra fees: Vanguard also does not impose an extra fee for trading outside of normal hours and stays true to their $0 stock trading commission. Other broker services, such as E*Trade, charge on shares traded after hours, and charges run at a penny per share.
Vanguard is an established trader that is ideal for long term investments and retirement. Using the after-hours trading platform allows you to make the best of your investments even when the market is closed.
What kind of trading does Vanguard allow after hours?
Limit orders, or an order to buy and sell a security at a specified price or better, can only
be purchased during extended hours. This is the only type of order Vanguard allows
to be traded after the market closes.
Other orders are not permitted, meaning you are limited to the type of trading you do. Market orders, OTC stocks, pink sheet equities, and foreign securities cannot be traded during the after-hours session.
However, short selling is available during Vanguard’s extended hours, so traders can make a bet that the price of a stock will fall if they come across news that indicates such.
What restrictions does Vanguard place on trading after hours?
Aside from only being able to trade limit orders and short sell after normal market hours, Vanguard imposes a few restrictions on its extended trading hours.
- Order limits: Most importantly, orders are limited to 99,999 shares. This is actually good news since many brokers have much lower limits, some as little as 25,000 shares. In fact, Vanguard offers some of the highest limits on extended-hour trades in the marketplace.
- No carry-over trades: Since Vanguard does not allow the trading of market orders during extended hours, orders that are placed expire at the end of the trading session and will not carry over to the next trading day.
This can be an issue if an order you have does not execute before the extended trading hours end. Sometimes, an order may not execute and thus the trade will be lost. For example, the market price may exceed the limit price before an order is completed.
- No phone trading: Vanguard also does not allow after-hours trading over the phone, and trades must be done online. This can be problematic for times when internet reception is poor. This is different than some other traders, like Webull, who only allow trades to be made over the phone after the market closes. Traders can use both the Vanguard website and the mobile app to trade during the extended hours.
Additionally, Vanguard only offers trading during its extended hours and does not offer a
pre-market session where shares can be purchased. Brokers who offer pre-market sessions have become quite popular as they allow trades between 8:00 a.m. and 9:30 a.m. EST.
This can be an issue if breaking news about a stock occurs before the opening of the market but after the extended-hours session. Vanguard’s extended hours also stop earlier than some brokerage services.
Some brokers offer after-hours trading sessions longer than Vanguard, like Schwab, which allows trades to be made up to 8:00 p.m. EST. There are also brokers that allow 24-hour trading five days a week, such as TDAmeritrade.
How to use the extended trading hours at Vanguard
There is no special requirement or paperwork that needs to be completed in order to
trade during Vanguard’s extended hours.
Placing an order on an after-hours trade is as simple as going to your Vanguard account, clicking on ‘My Accounts’, then ‘Buy & Sell’, and finally selecting ‘Trade during extended hours’.
You will need to verify that you accept the disclaimer which will show up on a pop-up window. After that, you are free to enter Vanguard’s extended trading hours service.
It is important to note that orders placed with Vanguard after normal operating hours go
to an ECN, or an electronic communications network, where they are then matched with
an opposing order. This type of trading can often result in partial fills because of low
liquidity, so it is important to note that orders may not be placed in whole.
Is Vanguard a good option for after-hours trading?
Vanguard is a reputable choice for after-hours trading in that it offers an easy way to trade after the market closes. Also, the fact that Vanguard does not charge fees on after-hour trades as some brokerage services do is a significant plus.
Whilst there are some drawbacks of using Vanguard, such as shorter extended trading hours, it remains a solid choice for placing limit orders or short selling after the market closes each day.
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%!).