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AFTER-HOURS TRADING

Trading Stock Options

Many online trading platforms today offer binary options that are available 24/7 and are accessible via desktop, laptop, tablet or mobile. Due to the rise of electronic communication networks (ECNs), After-Hours Trading (AHT) has gained mainstream popularity amongst investors. The most active trading hours for investors begin at the start of the London market opening at 8:00 GMT and end by the US market close at approximately 22:00 GMT. Peak market hours occur during the London-US overlap between 13:00 GMT and 16:00 GMT.

The 3 primary sessions in Forex markets include the London Sessions, the US Sessions and the Asian Session with the following hours of operation:

  • The London Session begins at at 8:00 GMT and closes at 16:00 GMT.
  • The US Session starts at 12:00 GMT and winds down by 22:00 GMT.
  • The Asian Session begins at 23:00 GMT and closes by 8:00 GMT.

After-hours trading is most active within the first hour or two after markets close. Many traders find a lot of opportunity during these times, particularly when they are unable to trade during regular hours or are looking for a new investment channel. Before beginning to trade after-hours, it’s important to research the potential risks that are associated with the method. Consult with your broker and review all relevant disclosure agreements. Broker services offered after-hours will vary just as they do during normal trading times.

The following are some risks to consider when trading during extended hours:

  • Customer service representatives may not be available at all hours and if any technical issues arise on the trading platform they cannot be addressed right away. Some problems that may be encountered include delays in processing a trade, canceling requests or platform-related glitches.
  • The majority of after-hours traders are usually individuals that work with financial institutions, such as mutual funds. They may have more information on stocks than an average investor which creates increased competition.
  • The prices of stocks traded after hours may not be reflective of the prices available during normal sessions. There may also be greater price volatility for stocks traded during extended hours due to news stories that have a direct impact on the financial markets.
  • Some companies allow traders to view quotes from a system that is only used for after-hours trading. You will need to check with your broker to see whether quotes are viewable or not through other ECNs. If there are quote limitations on one platform , you may not be able to execute a trade.

With globalization, financial markets have been able to meld together seamlessly which has worked to facilitate trading outside of normal timeframes. Being able to trade around the clock has its distinct advantages, but it’s pivotal to understand the associated risks prior to adopting this technique for the long-term.