Extended-hours trading

Extended-hours trading (or electronic trading hours, ETH) is stock trading that happens either before or after the regular trading hours (RTH) of a stock exchange, i.e., pre-market trading or after-hours trading.

After-hours trading is the name for buying and selling of securities when the major markets are closed. [1] 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).[2] 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 8:00AM ET.[3][4] After-hours trading on a day with a normal session occurs from 4:00 p.m. to 8:00 p.m. ET.[4] Market makers and specialists generally do not participate in after hours trading, which can limit liquidity.[5]

Example chart of extended hours trading, via Google Finance

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.[6] The emergence of private trading systems, known as electronic communication networks (ECNs), has allowed individual investors to participate in after-hours trading.

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).[7]

See also

References

  1. ↑ Sulthan, .A (2017). Stock Market Dictionary (1 ed.). Sulthan Academy. p. 229. ISBN 1522022864.
  2. ↑ "About Us: History". NYSE. Retrieved 2007-04-11.
  3. ↑ "Pre-Market Trading". Investors Underground. Retrieved 11 November 2016.
  4. 1 2 "Nasdaq Trading Schedule". NASDAQ. Retrieved 2011-08-02.
  5. ↑ "After Hours Trading". Investors Underground. Retrieved 11 November 2016.
  6. ↑ "SEC.gov". United States Securities and Exchange Commission.
  7. ↑ Barclay, Michael J. (2003). "Price Discovery and Trading After Hours". University of California, Berkeley.
  • "Trade After-Hours". Invest FAQ.

 This article incorporates public domain material from the United States Government document "https://www.sec.gov/investor/pubs/afterhours.htm".


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