The marketing and buying of securities outside normal trading periods is after-hours trading. This type of stock trading can take place between 9:30 in the morning and 4 PM. Potential sellers and buyers communicate with each other through electronic communication networks. This match will occur without making use of a stock exchange. Is your quest for after hours stock trading? Reading through the rest part of this article will help you on after hours stock trading.
Benefits Of After-hours Stock Trading:
- After-hours stock trading is comfortable
- This method of trading stock is flexible
- Economic indicators and important news are available outside normal trading hours
- Traders have the opportunity to trade on new information with ease
- You will not have to wait for normal trading day to make decisions
- Traders can find some great prices during this period
Limitation To After-Hours Trading:
A great risk attached to this form of trading is volatility
Real After-Hours Trading Periods:
Studies have shown that after-hours trading in the morning can occur between 8 AM and 9:15 AM. After-hours trading can as well occur between 4:15 PM and 8 PM. As early as 6 AM, you can also discover some pre-market trading. This opportunity can take place during normal trading periods and days. It will continue for a period of time until the market resumes in the morning.
How To Use After-Hours Volume To Find The Most Volatile Stocks:
When the bell rings, news releases or company earnings appear to traders. When traders react to the news, there will be both volatility and volume. Most of these events happen when the market is complete. This will give traders the avenue to react to the events as they appear. It means that a trader will not have to wait for the following day. If you want to take advantage of any opportunity, explore the calendar showing a list of stocks.
One important thing to know when finding the volatile stocks is to take note of them during the day. Go ahead to narrow them down into a smaller option of stock to trade. Traders can achieve this goal by using a filter of stocks carrying an average volume of fewer shares. If the shares do not show any important volume between 9:30 and 4 PM, then you may not expect changes.
Facts About After-Hours Trading:
This innovation in stock trading is possible through the operation of ECNs. ECNs remain a system that enables investors to communicate by using electronic devices. This system allows big investors to communicate without an appearance. The after-hours concept has been available in time past. This is to create an excellent communication medium for investors. Most investors can now access after-hours trading by using a brokerage account. This can refer to after-hours market and extended-hours trading.
When the last transaction occurs, then after-hours market closes. It will display the last cost of a stock that traders have access to in the after-hours market. It is a complex concept for people who do not understand the deal. The truth is that after-hours stock trading can be beneficial.