On the stock exchange, the regular hours for buying and selling shares and other securities are from 09:30 to 16:00 EST. Can you buy stock after market closes?
Trading hours before market opening are known as pre-market session, and periods after market close are known as after-hours session. The possibility of concluding transactions after hours, as well as the related rules and fees, depend on brokering. Most large brokers allow trading after hours between 16:00 and 20:00, but this is not a universal standard. For example, TD Ameritrade starts the session after 16:15, 15 minutes after the market closes. Others have narrower windows, such as Wells Fargo, which restrict after-hours trading to 16:05 to 17:00
In addition, some (but not most) brokerage houses charge extra fees for trading over longer hours. In particular, E * Trade charges a fee of USD 0.005 per share for extended time transactions. This fee translates into an additional USD 5 per transaction for 1000 shares, so you should read the policy of your brokerage house.
Differences in stock prices when trading for longer hours
The markets before and after hours will generally have less liquidity, more volatility and less volume than the regular market. 1 This can have a huge impact on the price that the seller ultimately receives for his shares, so it is wise to use a limited order on any shares bought or sold outside of normal trading hours.
Usually, price changes in the after-hours market have the same impact on stocks as changes in the regular market: an increase of one dollar in the after-hours market is the same as an increase of one dollar in the ordinary market. Therefore, if you have shares that fall from USD 10 (purchase price) to USD 9 during a regular trading session, but then increase by USD 1.50 to trade USD 10.50 over the market, you will incur USD 1 loss during the daily session (10-9 USD), but because prices have risen in overtime trading, you would have earned 0.50 USD per share.
However, when the ordinary market opens for trading the next day (when most individual investors will be able to sell), the shares will not necessarily open at the same price at which they trade after hours. For example, if the stock price rises in the after-hours market due to rumors of increased sales, there may be many investors who want to sell immediately in the market, increasing sales pressure, and possibly lowering the stock price from the level of the previous day’s hours.
Cost of trading inventories after hours
Traders with extended hours may also pay additional fees. E * Trading, for example, charges $ 0.0005 per share for extended hours.
If your broker supports extended-term transactions, you will probably be asked to sign a contract to use ECN. You may need to make a phone call with a representative who will make sure you know what you’re getting into.
Then you can place the order specifying the quantity, price and limit. Then it is recommended to monitor the status of the order. Orders for longer hours may not be completed completely or not at all due to limited quantities. And orders for extended hours are only valid for one day.
Transactions completed in longer hours are considered completed on that day. Therefore, shares purchased after hours the day before the dividend payment date are eligible for dividend payment. Shares purchased on the pre-sale market in the morning on the dividend day are not.