Extended hours trading
Encyclopedia
After-hours trading is stock trading
that occurs after the traditional trading hours of the major exchanges, such as the New York Stock Exchange
and the Nasdaq Stock Market
. Since 1985, the regular trading hours in America have been from 9:30 a.m. to 4:00 p.m. Eastern Time
(ET).
Trading outside these regular hours is not a new phenomenon but previously was limited to high net-worth investor
s and institutional investor
s like mutual funds. The emergence of private trading systems, known as electronic communication network
s or ECNs, has allowed individual investors to participate in after-hours trading.
After-hours trading on a day with a normal session occurs from 4:00 to 8:00 p.m. ET.
After-hours trading is frequently abbreviated on message boards as AH. That has led people to jokingly refer to after-hours trading as "amateur hour", as the people who trade during that time are mostly small retail traders and not institutional investors, and, barring material news, it frequently does not reflect how trading will be the next morning.
Trading also occurs before the traditional trading hours and is known as pre-market trading. Pre-market trading occurs from 7:00 to 9:30 a.m. ET.
National Association of Securities Dealers (NASD) members who voluntarily entered 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).
Stock trader
A stock trader or a stock investor is an individual or firm who buys and sells stocks in the financial markets. Many stock traders will trade bonds as well...
that occurs after the traditional trading hours of the major exchanges, such as the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
and the Nasdaq Stock Market
NASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
. Since 1985, the regular trading hours in America have been from 9:30 a.m. to 4:00 p.m. Eastern Time
Eastern Time Zone
The Eastern Time Zone of the United States and Canada is a time zone that falls mostly along the east coast of North America. Its UTC time offset is −5 hrs during standard time and −4 hrs during daylight saving time...
(ET).
Investor
An investor is a party that makes an investment into one or more categories of assets --- equity, debt securities, real estate, currency, commodity, derivatives such as put and call options, etc...
s and institutional investor
Institutional investor
Institutional investors are organizations which pool large sums of money and invest those sums in securities, real property and other investment assets...
s like mutual funds. The emergence of private trading systems, known as electronic communication network
Electronic communication network
An electronic communication network is the term used in financial circles for a type of computer system that facilitates trading of financial products outside of stock exchanges. The primary products that are traded on ECNs are stocks and currencies. The first ECN, Instinet, was created in 1969...
s or ECNs, has allowed individual investors to participate in after-hours trading.
After-hours trading on a day with a normal session occurs from 4:00 to 8:00 p.m. ET.
After-hours trading is frequently abbreviated on message boards as AH. That has led people to jokingly refer to after-hours trading as "amateur hour", as the people who trade during that time are mostly small retail traders and not institutional investors, and, barring material news, it frequently does not reflect how trading will be the next morning.
Trading also occurs before the traditional trading hours and is known as pre-market trading. Pre-market trading occurs from 7:00 to 9:30 a.m. ET.
National Association of Securities Dealers (NASD) members who voluntarily entered quotations during
the after-hours session are required to comply with all applicable limit order protection and display rules (e.g., the Manning rule
Manning rule
The Manning Rule is a finance term based on the NASD regulation, NASD IM-2110-2.The Manning Rule prohibits an NASD member firm from placing the firm's interest before/above the financial interests of a client....
and the SEC order handling rules).