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#1 26-08-2021 09:10:41

johnedward
Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 3132
Website

Trading after business hours

Trading after business hours


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After-hours (or extended hours) trading takes place outside of regular market sessions. In U.S. markets, the New York Stock Exchange (NYSE) and Nasdaq typically operate between 9:30 and 16:00 New York time, Monday through Friday.

After-hours trading on these exchanges includes post-market trading (between 16:00 and 20:00 NY time) and pre-market trading (which ends at 9:30 NY time). In the UK market, the London Stock Exchange is open from 8:00 to 16:30 London time, so the pre-market and post-market hours are 5:05 to 7:50 London time and 4:40 to 17:15 London time respectively.

Note that although the stock market is closed on weekends, some brokers allow you to trade in response to last minute press releases on Saturdays and Sundays. However, the stock exchanges are closed on certain national holidays, such as New Year's Day. Some trading sessions may also end earlier, especially on Christmas Eve.

After-hours trading uses an Electronic Communication Network (ECN) or Alternative Trading System (ATS) to match buyers and sellers without going through a traditional exchange. European markets refer to them as multilateral trading facilities (MTF), in accordance with regulatory requirements.

Why trade after hours?

Some of the biggest moves in the market can occur outside of regular sessions, with high volatility showing how the market will perform on the open. These opportunities can be very profitable.

For example, the S&P 500 futures contract is popular in pre-market sessions because it can indicate market sentiment for the day.

After-hours trading is also popular in the stock market, as high volume stocks can continue to be post-market activity for some time after the 16:00 close. News is often released after closing hours, which means investors rush to act on information before other traders. This can cause rapid and large changes in the price of the shares.

You can find the biggest moves on the Marketwatch After Hours Screener site or the Nasdaq Most Active List. Among the more active stocks are Apple Inc (AAPL), Exxon Mobil Corp (XOM), Microsoft Corp (MSFT) and General Electric Co. (GE).

The Dow Jones Industrial Average index also moves substantially after trading hours.

Traders might be tempted to trade any of these big stocks, but these don't offer as many opportunities. Therefore, as a general rule, avoid trading your Tesla, Uber, or Disney stocks and stick with the main winners.

After-hours trading strategy

A popular method of trading outside of business hours is to closely follow fundamental data such as macroeconomic releases and geopolitical events. This is called news trading and it is a popular strategy among traders.

As mentioned above, the after-hours market is often influenced by events that occur outside of regular opening hours.

It could be anything from announcing a government interest rate to a natural disaster.

Additionally, the expected outcome of an event is usually reflected in market prices before it actually happens, so it is important to stay on top of these updates. You can also open a position early, but always be sure to use limit orders.

Many investors choose to trade breakouts during these times. Breakouts usually occur after a period of consolidation, during which the price is relatively stable, with traders anticipating a large movement in the market.

You will need to analyse your live charts and use technical indicators in order to take advantage of these opportunities. Bollinger bands are especially popular for breakout strategies, so we'll cover them in more detail later.

Is after-hours trading right for me?

If you are wondering whether after hours trading is good or bad for your investment portfolio, a lot of it depends on your risk profile and your level of experience. Make sure to take this into account before making a decision.

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