Extended Hours Trading of StockPre Market and After Hours TradesExtended hours trading of stock encompasses both pre market and after hours trades. Extended hours trades are placed outside of normal stock market hours. Extended hours stock trading is primarily conducted via several Electronic Communication Networks (ECNs). In the past, only high net worth and institutional investors had access to these networks. But now, many online brokers offer this access to all of their clients.
Pre market trading is a form of extended hours stock trading which takes place on days that the markets are open but prior to the opening bell of the New York Stock Exchange. The pre market session is from 8:00-9:30 a.m.
In the U.S., trading after hours usually begins at 4:00 p.m. (Eastern Time)just after the major markets close and lasts until 7:30 or 8:00 p.m.
Extended Hours Trading TipsMarket conditions are not the same during extended trading hours as they are during normal stock market hours. There are fewer traders placing buy and sell orders at this time so volumes tend to be thin.There is one common exception to this. If important news--bad or good--breaks about a publicly traded company during extended trading hours, volumes are likely to be very high. If the news is bad, there will be a lot of panic selling. If the news is good, investors will rush to put on a position before the open if they believe the price will rise even more dramatically during the next session. This often happens and it is one of the things that makes the extended hours trading of stock so enticing to many investors. It is important to understand that the extended hours market is a person to person market. My buy order is matched against your sell order or there is no execution. Market makers may or may not participate. Because market maker participation is not required, the after hours market can be fraught with special perils. For one, expect wider spreads. Also, transparency is often lacking. The various ECNs display different after hours trading quotes for the same securities. An individual stock trader will only be able to see the quotes displayed by his or her broker's network. You won't be able to tell if you're getting the best price. My advice: Wait until you have some trading experience before placing extended or after hours trades. Even then, use a limit order even if your broker does not require you to do so.
Trading Intraday
There seems to be some confusion about what trading intraday is. Intraday trading simply refers to trades made during normal stock market trading hours as opposed to after hours or pre market trading.
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