Extended Hours Trading
Extended Hours Trading specifically refers to stock trading outside Wall Street's traditional trading hours of 9:30 a.m. to 4 p.m. EST. An Extended Hours order may only be placed and executed on one Electronic Communications Networks (ECN). Extended Hours investing involves unique risks that investors should fully understand before placing an order after hours. These risks include, but are not limited to, greater price volatility, less liquidity, and wider bid/ask spreads than during regular market hours. Prior to participating in this unique Extended Hours session, you should review and be aware of the various risks and requirements involved in Extended Hours Trading. While trading in the Extended Hours sessions is not new, in the past it has been a mostly institutional market with institutional traders working primarily on behalf of banks, insurance companies, mutual funds and pension funds.
Eligible Securities/Order Types
Extended Hours Trading is provided only in stocks listed on a national exchange and NASDAQ. eOption does not accept extended hours trades for pink sheet stocks, bulletin board stocks, or options.
Placing a Trade
Extended hours trades must be placed as a limit order. Due to the illiquid nature of extended hours markets, eOption will not accept market orders. Additionally, the order must have GTEM (Good Till End of Market) selected as the Time in Force Qualifier. If GTEM is not selected, the order will not be entered in the pre or post market session.
Please note, if a GTEM order is placed in the pre-market, the order will remain open for the pre-market session, the regular-hours session, and the after-hours session before being cancelled.
eOption customers have the ability to execute Extended Hours transactions between the following hours:
- Pre-Market 8:00 AM EST – 9:30 AM EST
- Post-Market 4:00 PM EST – 6:00 PM EST
|Up to 5,000 shares||$25.00|
|Over 5,00 shares||$0.003 Per Share|
Nature of Extended Hours Trading
ECNs provide a service to investors that want to trade during traditional and nontraditional hours. Since Extended Hours Trading for retail customers is still a relatively small market, many brokerage firms staff for the traditional trading hours, with a smaller staff during the Extended Trading sessions. The availability of customer support staff and other services relating to policies and operations during Extended Hours Trading may also be limited, including access to account information and account representatives and support staff (such as margin clerks and cashiers) especially in the event of heavy Internet traffic, phone usage, or system capacity problems.
Most ECN's only allow customers to enter limit orders, meaning they will only accept orders to buy and sell at a specific price. If a trade can't be consummated at that price, the order will expire unfilled. Essentially, the ECN systems simply list orders to buy and sell, and when they detect a match, the system automatically executes the trades. Regardless of whether or not a particular ECN allows market orders or sticks to limit orders only, it is good practice for investors to place only limit orders, thus protecting themselves somewhat from the wide price swings that might occur in the Pre and Post-trading sessions, when trading volume is lower.
 There is no broker-assist charge for extended hours trading.