In the US, the highest volume of stock trading takes place in the NY Stock Exchange and Nasdaq. Traditionally, these markets are open from 9.30 a.m. To 4.00 p.m.
However, all that modified in the late 1990s with the arrival of Electronic Communications Networks ( ECNs ) and smaller exchanges can now offer extended trading hours to individual financiers. You've got to understand the hazards associated with after hours trading so that you are better equipped to deal with the perils of stock investment.
Some brokerages allow stockholders to just see the quotes from one trading system utilised by the firm. This means you will not be in a position to see quotes from other ECNs, and this boundaries your buying and selling power. Even if you find a speculator to trade with, you will not be able to execute the trade if he is using another trading system . You check with your brokerage whether you'll be able to route your order through another ECN.
This indicates that you might not be able to convert stocks to cash as it will depend on the existence of buyers and sellers, and how easy it is to execute a trade. This complete process will, in turn, be conditional upon trading technique and it is a known fact that less volume of trade takes place during extended trading hours.
The fact that less volume of trading takes place, the spread between the bid and ask price increases and you might not be ready to find a good price and execute a trade.
Stocks that trade during extended trading hours tend to have larger price fluctuation compared to regular trading hours. New stories coming out after close of regular hours have great impact on the stock costs.
The cost of stock in after hours trading is not always true representative of the price during regular hours, so you have to be intensely careful when buying or selling stock.
Extended trading hours are given by most brokers and you can simply find the information on their site. This will also give you an insight into the services offered by your brokers as these services alter from broker to broker. It's best to go looking to find a brokerage that most nearly fits your wishes.
