Extended-hours trading
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Extended-hours trading (or electronic trading hours, ETH) is stock trading before or after the trading day regular trading hours (RTH) of a stock exchange, i.e., pre-market trading or after-hours trading.[1]
Market makers and specialists generally do not participate in after-hours trading, which can limit liquidity.[2]
Since 1985, the regular trading hours for major exchanges in the United States, such as the New York Stock Exchange and the Nasdaq stock market, have been from 9:30 a.m. to 4:00 p.m. Eastern Time (ET).[3] Pre-market trading occurs from 4:00 a.m. to 9:30 a.m. ET, although the majority of the volume and liquidity come to the pre-market at 8:00 a.m. ET.[4][5] After-hours trading on a day with a normal session occurs from 4:00 p.m. to 8:00 p.m. ET.[5] Overnight trading occurs from 8:00 p.m. to 4:00 a.m. ET, and only via electronic communication networks (ECNs) as opposed to stock exchanges.[6]
Trading outside regular hours is not a new phenomenon, but used to be limited to high-net-worth investors and institutional investors like mutual funds.[7] The emergence of private trading systems known as electronic communication networks (ECNs) has allowed individual investors to participate in after-hours trading. Extended-hours trading is all processed through ECNs including NYSE Arca.[8] For instance, the Blue Ocean Session is an overnight trading session available Sunday to Thursday on the Blue Ocean Alternative Trading System (Blue Ocean ATS; BOATS) since June 2021.[9][10][11] Yahoo Finance began displaying BOATS pricing data circa June 2025.[12]
Financial Industry Regulatory Authority (FINRA) members who voluntarily enter quotations during the after-hours session are required to comply with all applicable limit order protection and display rules (e.g., the Manning rule and the SEC order handling rules).[13]
Risks and limitations
[edit]Compared to trading during regular hours, extended-hours trading comes with additional risks. There is typically less volume in extended-hours trading compared to regular hours, which generally implies there will be less liquidity, wider bid–ask spreads, and greater volatility in extended-hours trading.[7] There is no guarantee that prices will carry over between regular sessions and extended-hours sessions as one ends and the other begins.[7] The ratio of professional traders to retail investors participating in extended-hours trading may be greater than during regular hours,[7] thus increasing the risk that the former can exploit the latter.
Many extended-hours ECNs only allow placing limit orders and not other types of buy/sell orders, decreasing flexibility for traders.[7] Access to these ECNs is also somewhat balkanized. Any given broker might only provide its clients access to certain extended-hours ECNs, thus decreasing liquidity within each ECN.[7]
See also
[edit]References
[edit]- ↑ "Extended Trading".
- ↑ "After Hours Trading". Investors Underground. 19 July 2016. Retrieved 11 November 2016.
- ↑ "About Us: History". NYSE. Archived from the original on 2010-06-18. Retrieved 2007-04-11.
- ↑ "Pre-Market Trading". Investors Underground. 19 July 2016. Retrieved 11 November 2016.
- 1 2 "US & Nordic Stock Market Schedule". Nasdaq. 2026. Retrieved 2026-09-23.
- ↑ Gratton, Peter (19 February 2026). "Overnight Trading: Definition, How It Works, and Example". Investopedia. Archived from the original on 2025-05-29. Retrieved 2026-09-23.
- 1 2 3 4 5 6 "After-Hours Trading: Understanding the Risks". United States Securities and Exchange Commission. 4 November 2008. Retrieved 2026-09-23.
- ↑ "stock exchange | Definition, Meaning, History, & Facts | Britannica". www.britannica.com. Retrieved 2022-03-13.
- ↑ "Frequently Asked Questions". Blue Ocean Technologies LLC. 2026. Retrieved 2026-09-23.
- ↑ "Blue Ocean ATS (BOATS)". ICE Developer Portal. Intercontinental Exchange. 2026. Retrieved 2026-09-23.
- ↑ "Corporate Fact Sheet". Blue Ocean Technologies LLC. 2026. Retrieved 2026-09-23.
- ↑ "Yahoo Finance Expands Global Coverage with New UK-Based Programming and 24/5 Market Data" (Press release). Yahoo Inc. 26 June 2025. Retrieved 2026-09-25.
- ↑ Barclay, Michael J.; Hendershott, Terrence (Winter 2003). "Price Discovery and Trading After Hours" (PDF). The Review of Financial Studies. 16 (4). The Society for Financial Studies: 1041–1073. doi:10.1093/rfs/hhg030. ISSN 0893-9454.
Further reading
[edit]- Lachance, Marie‐Eve (6 July 2023). "Night trading: Lower risk but higher returns?". Review of Financial Economics. 41 (4): 347–363. doi:10.1002/rfe.1180. ISSN 1058-3300.
External links
[edit]- "Trade After-Hours". Invest FAQ. 31 May 2019.
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