subject: Take Advantage Of Extended Trading Session: Must For Any Active Trader [print this page] Extended hours trading is yet another method that can present you with more effectiveness and convenience. Discover the hours as well as the Do's and Dont's of trading Pre-Market and After-Hours
The stock exchange regularly opens at 9:30 AM EST and closes 4:00 PM EST every week day less holidays. Having said that trading still takes place outside these regular hours using ECNs (electronic communication networks). Trading prior to the opening bell is referred to as Pre-Market Trading and following the closing bell is referred to as After-Hours Trading.
* Pre-Market Trading Hours from 7:00 AM EST to 9:30 AM EST.
* Market Hours from 9:30 AM EST to 4:00 PM EST.
* After-Market Hours from 4:00 PM EST to 8:00 PM EST.
Pre-Market and After-Hours trading is an additional way to provide more efficiency and convenience. The following are a couple of situations where Pre-Market and After-Hours hours trading really should be used
* Earnings are major movers for any particular stock and therefore are not revealed during the regular Market Hours. Pre-Market and After-Hours hours allow us benefit to possibly profit or reduce losses on earnings shocks.
* Yet another area could well be biotech's, where a single FDA statement can make or break a business. Extended hours, usually Pre-Market trading may help profit or minimize losses.
A thing of caution for Pre-Market and After-Hours trading, participation by market makers and ECNs is voluntary, so there may be less liquidity than during typical hours of trading, this may contribute to wider spreads. The subsequent steps are essential for Pre-Market and After-Hours trading
* Always use a limit order, the spreads get larger.
* Pay attention to the Time of Sales window to see if sufficient trades take place.
* In case the trade is intended for an intraday trade, the stop limits need to be wider versus the regular session otherwise you're going to get whipsawed.
by: Vicente Fontan
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