Are you searching for the right time to trade in the stock market? Did you ever hear about After Hours Trading? You must be thinking if it is possible to trade during after-hours or not? Well, in this article, you will learn what after-hours trading is. Also, we will answer the question you are probably asking yourself right now: “Can I Trade at This Time or Not?”
After Hours Trading
The official hours of the stock market start from 9 A.M and close at 4 P.M US Eastern Time. The stock market dealings after 4 P.M are called after-hours trading.
However, you cannot trade via the stock market during this session. The stock trading during after-hours is only done via electronic communication networks. Currently, several networks are available to provide stock related information. They can help you to sell or buy stock assets.
For example, the Nasdaq Communication Network is one of these platforms. It offers facilities to all investors to trade in the stock market. If you are using such a network to buy or sell stocks after the official closing of the stock market, then you are taking part in after-hours trading. Further, the after-hours trading remains open till 9 P.M US Eastern Time.
Can I Trade During After-Hours?
Yes, you can. In fact, you can trade before the opening and after the closing of the stock market. You need to have complete information on communication networks available to support stock market trading. Using these networks, you may check what other traders are doing.
With all this being said, a question comes in mind.
Should I Trade During After-Hours?
Let’s take a look at some of the reasons why investors trade during after-hours.
In case you hear any exclusive news about any organization, you may think of either selling or buying its stock. Notably, experts analyze the stock shares of a successful organization and then evaluate where to invest.
Sometimes, they sense the increase or decrease in the price of the stock. In this situation, they try to trade with those stocks as soon as possible. Thus, they try after-hours trading.
In actual, specials news or events create a spark amongst all traders and investors. Moreover, in this situation, after-hours trading proves to be highly helpful for them. Also, in this way, the stock exchanges remain active even after the closing of the stock market.
Risks Associated with After-Hours Trading
The people trade after the closing of official hours of the stock market, due to some specific reasons. These reasons may include any special news break about the company or event occurring with the respective organization.
Moreover, in this situation, the risk of loss is always higher. Why? Well, you can never predict the actual value of the stock during after-hours. Especially if you are new to the stock market. So, I will recommend you not to invest money before you gain knowledge in this sphere.
Furthermore, the price of the stock may fluctuate rapidly after the opening of the stock market. Thus, very few investors or traders buy or sell the shares after the closing of the stock market. Only, due to the release of exclusive news regarding stocks, the volume of trading may spike.
However, most of the people usually don’t prefer to invest after official hours of stock exchanges. Resultantly the volume of trading slows significantly after 4 P.M US Eastern Time.
Nowadays, most traders or investors do not prefer to trade after the closing of the stock market. Thus, it leaves a profound impact on the prices of stock. Furthermore, very few investors trade during after-hours.
Therefore, the fluctuating prices depend on the bid and the asking prices of the shares. The bidder bid the price of their choice, whereas sellers ask for the price of their choice. Resultantly, the stock values do not show the actual trading price of the companies’ stock.
If you are thinking of investing in the stock market, you have the opportunity to remain active after the closing of the stock market. Many companies sell their stock at a low price due to some reasons. You can invest your money in these stocks and hold them for a long time.
Moreover, long term investments may bring significant benefits to you. However, it is recommended to evaluate your options carefully. Also, you can always seek experts’ advice on this matter.
Investors trade after-hours in some exceptional cases. For example, in the event of a news break or event occurrence. In such a situation, they may immediately sell their stock even after the office hours of the stock market. However, it is recommended to think many times before you trade during after-market hours.
If you are interested to know more about after-hours trading, then you should read “Understanding Pre-Market and After-Hours Stock Trading”