Late trading
Encyclopedia
Late trading is trading executed after the standard local national exchanges have closed. This is distinct from after-hours trading
, as they have in context specific meanings, the former may be illegal while the latter is legal.
context, late trading involves placing orders for mutual fund share
s after the close of the stock market, 4:00 p.m for the New York Stock Exchange
, but still getting that day's closing price, rather than the next day's opening price. The price of mutual funds
is usually set only once per day, so intraday prices are not applicable.
this practice is illegal under SEC rules but many mutual fund managers appear to have allowed exceptions for certain hedge fund
s and other favored investors who were able to obtain that day's price, notwithstanding that their orders were received after-hours.
Extended hours trading
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...
, as they have in context specific meanings, the former may be illegal while the latter is legal.
Mutual funds
In the mutual fundMutual fund
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.- Overview :...
context, late trading involves placing orders for mutual fund share
Share (finance)
A joint stock company divides its capital into units of equal denomination. Each unit is called a share. These units are offered for sale to raise capital. This is termed as issuing shares. A person who buys share/shares of the company is called a shareholder, and by acquiring share or shares in...
s after the close of the stock market, 4:00 p.m for 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...
, but still getting that day's closing price, rather than the next day's opening price. The price of mutual funds
Net asset value
Net asset value is a term used to describe the value of an entity's assets less the value of its liabilities. The term is most commonly used in relation to open-ended or mutual funds because shares of such funds registered with the U.S. Securities and Exchange Commission are redeemed at their net...
is usually set only once per day, so intraday prices are not applicable.
Controversy
In the United StatesUnited States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
this practice is illegal under SEC rules but many mutual fund managers appear to have allowed exceptions for certain hedge fund
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
s and other favored investors who were able to obtain that day's price, notwithstanding that their orders were received after-hours.