Kirk Du Plessis 2 Comments. I guess there wouldn't be anymore day trading , but that's not the point. Heck, we don't even want to work 40 hours in a week that is the hole point of learning to trade for a living anyway right? The reality is that institutions and exchanges have limited most of the markets activity to between 9: This is where most of the activity happens.
But then there is after-hours trading. Yes, that includes you! Did you even know you could trade in after-hours and pre-market trading? Well you can thanks to the electronic communications network, or ECMs. Typically after-hours trading is going to work just like the normal market would, only it will have some limitations compared to a traditional trading day.
Your account will see trades in after hours. When companies announce earnings each quarter we get a one-time volatility crush. And while most traders try to profit from a big move in either direction, you'll learn why selling options short-term is the best way to go.
Click here to view all 10 lessons? What about your orders? What if your orders don't get carried over? Do they carry over to the next day? If there isn't anybody who is going to match up with you in after-hours trading, then your order gets expired.
On the other hand, " good-til-cancelled " orders will stay working and can go beyond the same trading day and beyond after hours and into the next day. Here are four risks that you need to be aware of right now if you want to participate in the after-hours market. It's always better to understand later then get creamed right now! Liquidity is a real issue in after-hours trading. Since there is low liquidity in the after-hours market, the spreads on most of your stocks are going to be very wide concerning the bid and ask.
So make sure you understand where the stock trading because it can quickly rally away from you or fall away. As I mentioned in the previous three points, since there is low liquidity, a lot of institutional traders and very wide spreads, you're naturally going to have an extreme amount of volatility in after-hours markets.
Not to mention that you should always check for earnings announcements or company news in the after-hours market. This can drive stocks higher or lower instantly after a company has announced something big.
So what do you think? Have you ever participated in after-hours trading? What is your opinion of after-hours trading? Kirk founded Option Alpha in early and currently serves as the Head Trader. Kirk currently lives in Pennsylvania USA with his beautiful wife and two daughters. I have had a few great trades during pre-market.
Many times the high of day happens during pre-market hours. Kirk Du Plessis 2 Comments July 9, Free Video Training Courses. Daily Options Trading Alerts.More...