Imagine that a stock that you’re following reports blow out earnings after the closing bell. Wouldn’t it be nice to purchase the stock before the market opens the next day? Extended hours trading enables you to make these kinds of trades, but there are important trade-offs to consider.
Regular stock market hours run from 9:30 a.m. to 4:00 p.m. Eastern Time every weekday (except holidays). If you want to react to news outside of these hours, you can place trades during extended hours sessions, including pre-market starting as early as 4:00 a.m. and after-hours as late as 8:00 p.m.
In this article, we will look at how extended hours works, important differences, benefits and drawbacks, and some strategies for active traders to consider.