Extended hours trading: risks & benefits

• Extended hours trading allows eligible investors to place certain trades outside the regular U.S. market session.
• Potential benefits include more flexibility, the ability to respond to news outside market hours, and additional access to market activity.
• Key risks include lower liquidity, wider bid-ask spreads, and greater price volatility.
• Orders placed during extended hours may not execute, may execute only partially, or may execute at a less favorable price.
• Extended hours trading may be helpful for some investors, but it may not be appropriate for everyone.

The market does not always move on a convenient schedule. Company earnings, economic reports, and major news can occur before the market opens or after it closes. Extended hours trading gives investors the ability to place certain trades outside of the regular U.S. market session, offering added flexibility for those who want more control over when they manage their investments.

Extended hours trading refers to trading activity that takes place outside the regular U.S. stock market session of 9:30 a.m. to 4:00 p.m. ET. It may include pre-market, after-hours, and overnight trading sessions.

You can place an extended hours order for most listed securities at any time during the hours of a particular session. For comprehensive information on placing an extended hours trade, please refer to our FAQs.

Regular day trading session: 9:30 – 4:00 ET

Extended Hours Pre-Market session: 4 AM – 9:30 AM ET

Extended Hours Post-market session: 4 PM – 8 PM ET

Extended Hours Overnight session: 8 PM – 4 AM ET, Sunday – Thursday

For some investors, extended hours trading can be a helpful tool. For others, the risks may outweigh the benefits. Before placing an order, it’s worth taking a closer look at both.

1. More flexibility in when you trade

Not everyone has time to follow the market during the regular trading day. Extended hours trading may give you more opportunity to review your portfolio and place eligible trades at times that better fit your schedule.

2. The ability to respond to news outside regular market hours

Important company news, such as earnings reports, leadership announcements, product updates, or other developments, may be released before the market opens or after it closes. Geopolitical events and other market-moving news can also occur at any time of day. Extended hours trading may allow investors to react to that information sooner, rather than waiting until the next regular trading session.

3. Additional access to market activity

Extended hours sessions can provide another window into how investors are responding to overnight, early-morning, or after-close developments. For investors who closely monitor their holdings, this added access may help them make more timely decisions.

While extended hours trading may provide more access, it also comes with important risks. These risks can be especially meaningful for investors who are newer to trading or who are used to the conditions of the regular market session.

1. There may be fewer buyers and sellers

Extended hours sessions often have lower trading volume than regular market hours. This is known as lower liquidity. When fewer people are trading, it may be harder to buy or sell a security at the price you want. Your order may be executed only partially, or it may not execute at all.

2. Bid-ask spreads may be wider

The bid is the price a buyer is willing to pay, and the ask is the price a seller is willing to accept. The difference between the two is called the spread. During extended hours, spreads may be wider than normal, which can affect the price you pay when buying or the price you receive when selling.

3. Prices may move more quickly

Prices can be more volatile during extended hours. That means a stock or ETF may rise or fall more sharply than it might during regular trading hours, especially when news is released and fewer market participants are active. A security’s price after the close or before the open may not reflect where it traded at the prior close or where it will trade when the regular market opens again.

4. News can have an outsized impact

Company announcements, economic reports, or global events can cause sharp price moves and large price swings during extended hours. Because there may be fewer buyers and sellers, the initial price reaction may be exaggerated and could revert when regular trading resumes.