Post- Trading - After Hours Trading - Csquared Trading

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Post- Trading – After Hours Trading

 Extended Trading Hours Part 1

After hours trading as it sound starts from 4:00 pm to 6:00 pm ET. After the regular hours of trading investors would want to trade as some of the key moves and decisions are made outside the normal trading hours. Trading after hours previously was limited to high net worth investors and other institutions but now it is open for all kinds of individual investors thanks to the introduction of electronic communication networks (ECN). There are few rules and regulations which need to be followed by the investors trading after normal hours:

  • Only listed stocks can be traded. OTC stocks, bonds, funds, options and other securities are not allowed.
  • Only day orders can be placed during the after hours of trade.
  • Extended hours trades may not exceed set number of shares per order.

 

Extended Trading Hours part 2

There are few advantages and disadvantages which are faced by the investors while trading after trade hours.

Advantages:

  1. Investors can stay ahead from others as company’s reported quarterly earnings are usually disclosed before or after trading hours.
  2. It gives the individual investors to make up for any wrong decisions made during the normal trading hours.
  3. News of geopolitical events or any economic data like GDP or weekly jobless claims are also disclosed before or after trading hours.

Disadvantages:

  1. Limitations to place orders
  2. Competition with the institutions and professional traders having more knowledge and inside information.
  3. Liquidity is usually low on after hour trading which makes the price more volatile.

A day end well might give an investor a lead to start the next day positively. Often price sensitive information’s are disclosed outside normal trading sessions which might prove vital before the starting of the next day of trading. It is always good to stay prepared before each new day and nothing better to keep a close eye on after trading hours of each trading day.