There is no doubt that E*TRADE Financial Corporation (NASDAQ: ETFC) (“E*Trade”) offers some of the best options and futures at the prices available along with 24/7 support from specialists who know the market inside and out.
The Regular Trading Hour Session on E*Trade is from 9:30 a.m. until 4:00 p.m. ET, Monday through Friday (excluding market holidays).
On February 20 2018, E*Trade announced (see here) that its customers can trade 24 hours a day, five days a week. Therefore, E*Trade now offers 24-hour trading to investors and traders, subject to the following:
- Trading time is from Sunday at 8 p.m. to Friday at 8 p.m. ET, excluding market holidays.
- Trading hours are from 7 a.m. to 4 a.m. ET on etrade.com, and from 4 a.m. to 7 a.m. ET by phone at 800-387-2331 (broker-assisted fee waived), excluding market holidays.
The Extended Trading Hours On E*Trade
Almost all influential exchanges follow extended trading hours, and the same is true of US markets as well. Traditionally, these markets used to trade between standard trading hours. However, now these markets are held on pre-announced special days during non-market hours and on holidays.
To bring the US market in line with world markets, E*Trade Financial Corporation has instituted extended trading hours.
The following are the details associated with the extended trading hours, as mentioned in the E*Trade Extended Trading Agreement (see here).
- Services offered: The platform offers pre-market, after-market, and overnight extended trading sessions (excluding market holidays).
- Pre-Market Session: 7 a.m. until 9:30 a.m. ET, Monday through Friday.
- After-Market Session: 4:00 p.m. until 8:00 p.m. ET, Monday through Friday.
- Extended Hours Overnight Session: Sunday through Thursday, 8:00 p.m. to 7:00 a.m. ET. The following things to consider while trading during the extended hours overnight session:
- In comparison to the pre-market and after-market sessions, the overnight session involves significantly more liquidity and volatility risk, as well as price spread and movement risk.
- As per the platform, it is anticipated that limited liquidity will result in either a lower price or greater volatility during this extended overnight session, and it may not be possible to sell an asset promptly.
- The main risk while trading during extended hours is a lack of liquidity. With extended hours trading, you risk negatively impacting the market price by being unable to trade securities.
- Furthermore, due to imbalances in demand, you may be unable to transact in securities at market value, resulting in bid and ask spreads that make matching buyers and sellers more difficult.
- The platform requires clients to submit only limit orders during extended-hours trading.
- During this session, the platform routes orders to a single alternative trading system (ATS).
- The orders which are not executed by 4:00 a.m. ET will be cancelled and can be re-entered by calling 1-800-387-2331.
5. Eligible Orders: The following are the eligible orders during extended-hours trading:
- The platform accepts only ‘limit orders’ to trade.
- The platform accepts only ‘accept orders’ for execution on the current trading day.
- For these hours (other than the Overnight Trading Session), the client may request to sell short.
How Can I Trade Stocks After Hours?
The majority of stock market trading takes place during regular business hours, but beginner investors can trade after hours using various technology platforms.
On the New York Stock Exchange and other exchanges, investors can buy and sell equities during regular trading hours. They can also trade on electronic communication networks, or ECNs, which are digital markets.
Only ECNs are used for after-hours and premarket trading. Those that trade stocks after hours do it between the hours of 4 p.m. and 8 p.m. ET.
Each ECN, however, has its own set of regulations. Individual brokerages have their own set of restrictions for trading after hours. An investor interested in trading after hours should review a broker’s policies to discover what is permitted.
There are a variety of platforms where you can trade after hours. Many of these are well-known brokerage firms, such as Schwab, Wells Fargo, and Merrill Edge. Each of these has its own set of regulations regarding when you can trade after hours.
Trading Stocks After Hours: How Much Does It Cost?
Traders who trade after hours may be charged an additional cost. For example, during extended hours, E*Trade costs $0.0005 per share.
If your broker allows you to trade after hours, you’ll almost certainly be asked to sign a contract agreeing to use the ECN. You may be required to consent to speak with a representative over the phone to ensure that you understand what you’re getting into.
Then you can place an order with the amount, price, and time limit specified. After that, it’s a good idea to keep an eye on the status of your order. Due to restricted numbers, orders placed during extended hours may not be filled completely or at all. Orders for longer hours are only valid for one day.
Trades conducted after regular business hours are deemed finished on that date. As a result, a stock purchased after hours the day before its ex-dividend date qualifies for the dividend.
The Advantages of After-Hours Trading
The following are the benefits of extended-hours trading:
- Extended-hours trading offers convenience that isn’t always available during regular trading hours. Because not everyone can trade full-time, one of the main advantages of after-hours trading is the ability to trade outside of conventional trading hours.
- Traders can benefit from attractive stock prices during off-peak hours, even though extended trading is often characterised by very volatile stock prices. A trader can benefit from placing a trade before the next trading session if a stock is affected by a news event, for example.
- Investors can trade new information provided after the closing of the regular trading day during off-peak sessions. Traders can respond fast to fresh information and conduct trades to manage their positions before the next trading session.
What Are the Best After-Hours Stocks to Buy?
Investors might react to important events and new information by trading after hours.
Late-night breaking news, company earnings reports, or political unrest are examples of these events. Rather than waiting until the next day, such trading lets investors react to new developments as they happen.
Many investors choose equities that trade at a high volume during the day. Extended-hours, stocks with limited volume or that are unlikely to be impacted by after-hours news may have extremely wide bid-ask spreads.
Extended hours trading may allow you to act on something quickly, but keep in mind, that by doing this the additional factors should be considered, such as:
- High Volatility: High volatility can lead to big price swings in either direction.
- Lower Volume: Volume in extended hours is considerably lower than in the regular session. This can cause the stocks to bid and ask prices to widen. This could make it more challenging to buy and sell at your desired prices.
However, a stock price can become more volatile during extended hours if, for example, a company announces that it is being bought out by another company. At this time, the volume may spike and can cause higher than normal swings in either direction.
- Low Liquidity: In terms of investing, since the liquidity and trade volume are relatively lower in the pre-market and after-hours trading sessions, only limit orders are allowed during extended hours
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