Whenever it was introduced around the turn of the century, after hours, stock trading was going to turn Wall Street into the street that never sleeps. It has certainly helped in some cases, being able to trade after the Wall Street shutdown, but is it really something that has become popular? What are the benefits of after-hours stock trading and how can you take advantage of this relatively new system?

After hours, stock trading seems like something that was really a good idea when it first came out, yet it never really caught on as predicted. In fact, only about 1% of all daytime trading on Wall Street is actually part of after-hours trading. This does not mean that it is a bad idea to take advantage of this, especially if you are familiar with the system. However, many people prefer to do their business only during the day and this also adds to the lack of interest in after hours trading.

The first thing you should be familiar with is the fact that each individual broker will have their own services that they offer for after hours of stock trading. They can also try to steer you away from doing all of this together, especially since stocks tend to be volatile on a daily basis and can shift by when the stock market actually opens in the morning. Here are some of the risks associated with this type of trading.

One of the first things that you will notice with this type of operation is that you cannot see all the available quotes. In fact, depending on your brokerage firm system, you may only have access to a particular quote for your shares. You may also not be able to trade as freely in the market after hours because there are not so many people available to trade stocks at that time. What this basically means is that you don’t have the liquidity available during regular Wall Street hours.

Some of the other problems with after-hours stock trading include a fluctuation in prices, limited trading activity, overreaction to sensational news, and delays in executing your stock orders. For these reasons, many people have decided to stay away from after-hours stock trading and only follow the standard trading hours that Wall Street is open. Does this mean that it is always a bad idea to trade stocks after hours?

Could not be farther from the truth. There are times when the news and other elements favor a large number of operations outside of office hours. When this is the case, a lot of activity can occur after Wall Street is closed for the night. As with most things in stock trading, it all has to do with timing. If you properly time your after-hours trades, you can certainly walk away from the table as a winner.

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