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Afterhours and Pre-Market Trading RSS Feed

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Created
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Moderator di4
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For all of us trading addicts that can't get enough from 9:30-4pm est
 

This board is to post about stocks that are moving pre and post market.

(I'll work on the ibox later)

http://www.nasdaq.com/newscontent/20090216/understanding-pre-market-and-after-hours-stock-trading.aspx

Understanding Pre-Market and After-Hours Stock Trading

By S. Wade Hansen, analyst at LearningMarkets.com

Getting a Leg Up on the Competition

The U.S. Stock Market is open for business for six-and-a-half hours---from 9:30 a.m to 4:00 p.m. ET---nearly every business day, and it draws crowds of thousands upon thousands of investors as soon as the opening bell rings. Wall Street is crowded during normal trading hours, but some investors are finding a less crowded space to trade in: the pre-market and after-hours stock trading sessions. Understanding Pre-Market and After-Hours Stock Trading

That''s right...as you will see in the Pre-Market and After-Hours Stock Trading video, you can actually trade before the market opens in the morning, and you can keep on trading once the market has closed in the afternoon. Of course, the playing field is a little different during off-market trading hours than it is when the full stock market is open, but we''ll cover that.

After-Hours Stock Trading

As its name suggests, after-hours stock trading occurs after the regular stock market hours---9:30 a.m to 4:00 p.m. ET---are over. After-hours stock trading takes place between the hours of 4:00 to 8:00 p.m. ET.

But why would you want to trade stocks in the after-hours trading session?

According to Chris Concannon, an executive VP in the Transaction Services Group at NASDAQ, "Many companies report earnings either before the market opens or after the market closes. The intrinsic value of a stock is constantly moving whether the market is open or not, and people want to access the market when the intrinsic value is changing."

Pre-Market Stock Trading

As its name suggests, pre-market stock trading occurs before the stock market opens up for its regular hours of trading at 9:30 a.m ET. Pre-market stock trading takes place between the hours of 4:00 to 9:30 a.m. ET.

Investors like to trade in the pre-market session for the same reason they like to trade in the after-hours trading session...they want to get a leg up on the competition by reacting quickly to news announcements that occur when the regular market is closed.

Risks of Trading After Hours and Pre-Market

All investing involves risk, but the Securities and Exchange Commission (SEC) outlines the following eight risks that are specifically associated with trading in the after-hours and pre-market sessions:

1. Inability to see or act upon quotes: Some firms only allow investors to view quotes from the one trading system the firm uses for after-hours trading. Check with your broker to see which firms quotes you will be able to see and off of which quotes you will be able to trade.

2. Lack of liquidity: During regular trading hours, buyers and sellers of most stocks can trade readily with one another. During after-hours, there may be less trading volume for some stocks, making it more difficult to execute some of your trades.

3. Larger quote spreads: Less trading activity could also mean wider spreads between the bid and ask prices. As a result, you may find it more difficult to get your order executed or to get as favorable a price as you could have during regular market hours.

4. Price volatility: For stocks with limited trading activity, you may find greater price fluctuations than you would have seen during regular trading hours.

5. Uncertain prices: The prices of some stocks traded during the after-hours session may not reflect the prices of those stocks during regular hours, either at the end of the regular trading session or upon the opening of regular trading the next business day. This means that even if a stock price rises in after-hours trading, it may fall right back down when regular trading opens again and the rest of the market gets to cast its vote on the price of the stock.

6. Bias toward limit orders: Many electronic trading systems currently accept only limit orders in the pre-market and after-hours sessions. Limit orders may cause you to miss out on having a trade filled.

7. Competition with professional traders: Many of the after-hours traders are professionals with large institutions, such as mutual funds, who may have access to more information than individual investors.

8. Computer delays: As with online trading, you may encounter during after-hours delays or failures in getting your order executed, including orders to cancel or change your trades.

Conclusion: Understanding Pre-Market and After-Hours Stock Trading

If you are looking for an edge in your stock trading, placing trades in the pre-market and/or after-hours trading sessions may be a great place to start. Just remember that there are additional risks you need to be aware of.

Check with your broker to see if it offers off-hours trading and what you need to do to qualify.

I''ve scratched the surface here in the article, but I go into more detail in the Pre-Market and After-Hours Stock Trading video.


Learning Markets offers daily articles, videos and investing guides---for free---about everything from investing in stocks and options to trading currencies in the forex market and more. Visit LearningMarkets.com to learn more about investing and to interact with other investors just like you.


http://quotes.nasdaq.com/asp/MasterDataEntry.asp?page=Pre-Market

About the Pre-Market Trading Page

This page contains Pre-Market trading activity up until 9:30 AM every trading day. Extended trading data from The Nasdaq Stock Market is shown on a 15 minute delayed basis.
Pre-Market trading is only shown if the stock if it is a component of the Nasdaq-100 Index.
Data Definitions

Pre-Market Time
the time of the pre-market trade Eastern Standard Time.
Pre-Market Price
the trade price of the pre-market trade.
Pre-Market Share Volume
the number of shares traded in each recorded premarket trade.

Why Investors Care

Investors find that pre-market Nasdaq-100 trading provides a leading indicator for regular hours trading. Investors may use the data to judge the strength of buying in the stock at the time of regular market open. They may also use information gathered for the pre-market activity to judge the opening price of the stock and how long that price will generally be supported by the market.

Learn more about pre-market stock trading in our Learning Markets area.
Data Provider

Data is provided by The NASDAQ OMX Group, Inc.
Update Schedule

Every trading day during pre-market trading hours on a 15 minute delay.



http://quotes.nasdaq.com/asp/MasterDataEntry.asp?page=After%20Hours%20Market

About the After Hours Trading Page

After-Hours activity is shown on the site from 4:15 - 8:00 PM every trading day (actual trading starts at 4:00 PM EST). Extended trading data from The Nasdaq Stock Market is shown on a 15 minute delayed basis.

After-hours trading is only shown if the stock if it is a component of the Nasdaq-100 Index.
Data Definitions

After-Market Time
the time of the after-market trade Eastern Standard Time.
After-Market Price
the trade price of the after-market trade.
After-Market Share Volume
the number of shares traded in each recorded after-market trade.

Why Investors Care

Investors find that After-hours trading activity provides a leading indicator for next-trading day activity as well as providing insight Global Markets trading activity as those markets start up within hours of the close of the U.S. after-hours market.

Learn more about after hours stock trading in our Learning Markets area.
Data Provider

Data is provided by The NASDAQ OMX Group, Inc.
Update Schedule

Every trading day during pre-market trading hours on a 15 minute delay.

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