Does E*TRADE Allow After-Hours Trading?

Does E*TRADE Allow After-Hours Trading?

It is not unusual to find traders that trade passively in the market and have other engagements during trading hours and so, might not be available to trade during the trading hours. Whether you are an active or passive trader on E*TRADE, you might be wondering if E*TRADE offers extended hours trading to their customers. So, does E*TRADE allow after-hours trading? Yes.

E*TRADE allows you to trade after hours on their platform. The periods for extended hours trading on E*TRADE include:

(1) The Pre-Market Period (7:00 a.m. to 9:30 a.m. ET) from Monday through Friday,

(2) The After-Market Period (4:00 p.m. to 8:00 p.m. ET) also from Monday through Friday and,

(3) The Overnight Period (8:00 p.m. to 7:00 a.m. ET) from Sunday through Thursday.

In this article, I am going to talk about

  • Whether E*TRADE charges for after-hours trading.
  • How to enable extended hours trading on E*TRADE.
  • Whether E*TRADE allows paper trading during extended-hours trading.

Does E*TRADE Charge for After-Hours Trading?

Many brokerage firms offer their customers the after-hours trading feature for free. Robinhood is one of such brokers. However, after-hours trading is not free on E*TRADE. If you wish to trade after-hours on E*TRADE, you will be charged $0.005 per share traded during the after-hours.

How to Enable Extended Hours Trading on E*TRADE

By default, the extended hours trading feature is turned off on E*TRADE. So, if you want to trade during extended hours you will have to enable that feature. Follow the steps outlined below to enable extended hours trading on your E*TRADE account.

  1. First, you have to go to etrade.com and sign in with your user ID and password. After you are logged in, you will be shown your account on the E*TRADE website.
  1. Just below your individual brokerage account, click on the drop-down menu which is directly next to quick links.
  1. From the drop-down menu, click on trade. After you click on trade, you will be taken to your trading page where you will be required to place your trade.
  1. After you have placed your trade, click on the drop-down menu which is directly below the “duration” section, and select the option of “extended hrs. day (7 am.-8 pm. ET)”
  1. Next, click on preview which is located at the bottom right side of the trading page. Once you click this, E*TRADE will require you to sign the extended hour’s disclosure agreement.
  1. At the bottom of the page, you will see the extended hours agreement highlighted in blue. Click on it and go through the extended hours trading agreement.
  1. If you are comfortable with the terms of the agreement, then click on agree which is located at the very bottom of the agreement.

If you follow the above steps, you should be able to trade during extended hours and you can even go back to your E*TRADE app and trade from there if you like.

Risks Associated with Trading During Extended Hours

There is no doubt that trading during after-hours has its perks. When you trade during after-hours, you have less competition because the market is usually less populated and this gives you a bit of leeway to take advantage of the stock market. Also, when you trade during the after-hours you can take advantage of events that occur in the market after 4 p.m. such as the activities of other foreign markets.

Despite the perks that come with trading after-hours, there are also a lot of risks associated with trading during after-hours. The risks could outweigh the perks depending on what you hope to achieve, and it is only right that you be aware of the risks if you decide to trade after-hours. Some of the risks include, but are not limited to the following:

  1. Battling with Experts: Most retail investors do not trade after-hours. The extended hours are packed with experts, people who trade for a living and probably have more experience than you. This could put you at a disadvantage if you decide to trade during these hours.
  1. Restriction of Orders: Most brokers only permit limit orders after-hours. This automatically means that your orders will only be carried out when they are paired with a seller or buyer that matches the price you set. Since during extended hours the market is not as, your orders might not be executed at all.
  1. Low Bids: Unlike the regular hours where there is an influx of investors active in the market, during the extended hours there are only a few players active. Due to this factor, you will most likely receive few bids as well as low bids for your orders. Consequently, you might earn less than you would have earned trading during the regular hours. 

Does E*TRADE Allow Paper Trading After-Hours?

Paper trading is a very common service that most brokers offer these days. It is simulated trading that allows new investors to trade (via a program that tries to replicate most of the features in a real market) without risking real money. When you paper trade, you have the opportunity of experiencing the market firsthand without risking real money. 

If you are new to trading and you decide to use E*TRADE, then this feature is just right for you because, unlike many brokerage firms that do not offer paper trading to their customers, E*TRADE provides its customers with the paper trading feature. Moreover, E*TRADE also lets you paper trade during the extended hour’s session and not just during the regular session (9:30 a.m. to 4:00 p.m. ET)

Conclusion

In this article, I told you that E*TRADE permits their customers to trade during extended hours on their platform at specific times for a fee of $0.005 per share. We have also looked at how to enable extended hours trading on E*TRADE.

If you have enjoyed this article, please share it with others. If you have any questions, please let me know in the comments and I will answer them as soon as I can.

Till next time… 


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