Trading Done After Trading Hours

Trading Done After Trading Hours

The process where a security is bought or sold after they have completed outside of the normal trading hours is known as “After-Hours Trading”. If one wants to perform trades outside the trading hours that is 9:30 a.m. to 4:00 p.m. which is the standard time set and it is according to Eastern Standard Time makes use of electronic communication networks. Electronic ways have become widely popular in after-hours trading as well as trading of cryptocurrencies. You can go through this source to know more. Through this electronic communication networks, a match is found of people who potentially want to buy and sell without making use of any stock market.

After-Hour Trading in Detail

The new era of trading stocks came into existence when electronic communication emerged. The features of ECN is not limited to behave like an interface which will allow interaction electronically to the investors, it will allow investors of an institutional level to interact in an anonymous way, hence, the investor’s actions are hidden. In the year 1990s, the ECNs became more broadly available after which institutional investors were the primary users of after-hours trading. By making a brokerage account the after-hours trading can be accessed by many investors. Now, this trading is known as ‘extended-hours trading’ and the ‘after-hours market’.

There are two different time frame in which after-hours trading can be done one is in the morning and one is in the afternoon. In the morning it starts approximately at around 8:00 a.m. and ends at 9:15 a.m. In the afternoon it expands from 4:15 p.m. and ends at 8:00 p.m. There are few pre-market trading that happens which start early in the morning at 6:00 a.m. This trading happens one the regular days of trading and sometimes might will last till the time the market reopens next morning.

Advantages of After-Hours Trading

There so many advantages that trading after the hours of regular trading has got over to the investors. One of the many advantages is convenience. Flexibility is added by after-hours trading for a trader who is willing to opt to trade at an off-peak time. Releasing a lot of important new events like economic indicators and earnings releases happens after the standard hours of trading. An opportunity to trade instantly on new data can be done by the sessions offered by after-hours trading instead of waiting till the time the position is taken by the conventional trade. Moreover, even though there is a risk of volatility that is linked with after-hours trading, there are chances that traders might find few prices that are attractive during this time.