Extended-hours trading: how pre-market and after-hours trading works

What are extended trading hours?

Extended-hours trading lets you trade the same listed stocks and ETFs outside regular market hours. It includes pre-market trading before the opening bell and after-hours trading following the market close.

For stocks listed on US exchanges, extended-hours trading takes place outside the regular market session of 9:30 am to 4:00 pm Eastern Time (ET).

Pre-market trading can begin as early as 4:00 am ET and continue until the regular session opens at 9:30 am ET. After-hours trading begins after the 4:00 pm ET close and can continue until 8:00 pm ET.

These are broad market hours rather than guaranteed trading windows. The hours available to you depend on your broker or trading platform, and some may provide access for only part of the extended-hours session.

Regular market hours

Regular trading hours for the NYSE and Nasdaq run from 9:30 am to 4:00 pm ET on trading days, excluding market holidays and scheduled early closes.

This is the main US trading session and generally has higher trading volumes and liquidity than extended-hours sessions. Trading before 9:30 am or after 4:00 pm ET falls outside regular US market hours.

Pre-market session

Pre-market trading can begin as early as 4:00 am ET and runs until the regular market opens at 9:30 am ET. However, not every broker provides access for this entire period, and some platforms open their pre-market sessions later.

Prices can move during pre-market trading in response to economic data, company earnings, analyst updates and developments in global markets. Trading volumes may be lower than during regular hours, which can contribute to wider bid-ask spreads and greater price volatility.

After-hours session

After-hours trading begins once the regular market closes at 4:00 pm ET and can continue until 8:00 pm ET, depending on the broker or platform.

Many companies release earnings and other announcements after the regular market closes, which can lead to significant price movements during this period. As with pre-market trading, lower liquidity and wider spreads can mean that extended-hours prices behave differently from those seen during the regular session.

Broker-specific access windows

Extended trading hours can vary between brokers and platforms. Some give you access to the full pre-market or after-hours session, while others offer shorter trading windows. You may also see 24/5 trading for selected stocks and ETFs.

Before trading, check your broker's available hours, which assets you can trade and which order types are supported. Orders placed outside the available trading window may be held until trading opens.

Trading hours also vary across global markets. If you're trading shares listed outside the US, check the hours of the relevant exchange as well as those offered by your broker.

How extended-hours trading works

Extended-hours trades are usually handled electronically. Your broker sends your order to an electronic trading venue, such as an electronic communication network (ECN), which matches buyers and sellers based on the prices available.

When you place an extended-hours order, the process generally works like this:

1. You place an order for an eligible stock or ETF.
2. Your broker sends the order to an available electronic trading venue.
3. The venue looks for a matching order at the right price.
4. If a match is available, the trade can be executed. If not, the order may remain open until it can be filled or until it expires.

For example, if you place a limit order to buy a stock at $25.00 but the lowest available selling price is $25.15, your order won't execute unless a seller is willing to accept $25.00 or the selling price falls to that level.

Lower trading activity during extended hours can also mean wider bid-ask spreads and fewer shares available at a quoted price. A stock with a narrow spread during regular trading hours could have a much wider spread before or after the main session.

Before trading outside regular market hours, check your broker's rules. These can determine which stocks and ETFs are available, which order types you can use, when orders can be placed and how long they remain active.

Why limit orders are common in extended-hours trading

Limit orders are commonly used during extended-hours trading because they let you set the maximum price you are willing to pay when buying or the minimum price you are willing to accept when selling. Some brokers only accept limit orders during these sessions, so check which order types your broker supports.

A limit order gives you more control over the price of your trade, but it doesn't guarantee that the order will be filled. If the market doesn't reach your chosen price or there aren't enough buyers or sellers available, your order may remain unfilled.

This can be particularly important during extended hours, when lower trading volumes and wider bid-ask spreads can lead to larger price differences between available orders. Always check how your broker handles extended-hours orders, including whether unfilled orders expire at the end of the session or remain active for the next trading session.

Why traders use extended trading hours

Extended-hours trading gives investors the opportunity to respond to market developments before the next regular trading session begins. These can include:

• Earnings releases and company updates
• Economic data
• Geopolitical developments
• Moves in global markets

For example, a US-listed company may release its earnings after the closing bell. Investors with access to after-hours trading can respond to the announcement rather than waiting for the market to reopen at 9:30 am ET the next trading day. 

Extended hours can also provide more flexibility for investors who cannot trade during the regular U.S. session, particularly those in different time zones.

However, being able to trade sooner doesn't necessarily mean getting a better price. Lower liquidity, wider spreads and fewer market participants can affect prices and execution during extended-hours sessions.

What to consider when trading extended hours: main risks

Extended-hours trading can offer more flexibility, but market conditions may differ from those during the regular session. With fewer participants active, you may see lower liquidity, wider bid-ask spreads and greater price movements.

Lower liquidity

Trading activity is often lower during pre-market and after-hours sessions than during regular market hours. This means there may be fewer buyers and sellers available at a particular price.

Lower liquidity can affect how quickly an order is filled and whether the full order can be executed at the price you expect. Larger orders may also be filled across several price levels if there aren't enough shares available at one price.

Wider bid-ask spreads

The bid-ask spread is the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept. During extended hours, this gap can be wider because fewer participants are trading.

For example, a stock trading around $50 might have a bid of $49.70 and an ask of $50.30 during a quieter session. A wider spread can affect the price at which you're able to enter or exit a trade.

Higher volatility

Prices can move more quickly during extended hours, particularly following earnings releases, economic data or other significant market news.

With fewer orders available, new information can have a greater effect on prices. These movements may also change once the regular session begins and more participants enter the market.

Limited quotes

Quotes during extended hours may be based on activity from fewer trading venues and market participants than during the regular session. 

As a result, the price you see may represent a smaller part of overall market activity. Prices can change as trading activity increases and more buyers and sellers enter the market.

Trading halts and platform limits

Trading halts and broker-specific restrictions can also affect extended-hours trading. Depending on the circumstances, an order may be delayed, rejected or remain unfilled until trading becomes available again.

Broker rules can vary, so check the trading hours, eligible assets and order requirements that apply to your platform before placing a trade.

Why extended-hours orders may not fill

Extended-hours orders may not be filled if there aren't enough buyers or sellers available at your chosen price. Lower trading activity means an order can remain open even when the market price appears close to your limit.

Depending on the available liquidity, an order may:

• Be filled in full
• Be partially filled if only some shares are available at your price
• Remain unfilled if no matching order is available
• Expire at the end of the trading session

For example, if you place an order for 100 shares but only 60 are available at your chosen price, those 60 shares may be filled while the rest of the order remains open. 

How long an unfilled order stays active depends on the order type and your broker's rules. Some extended-hours orders expire when the session ends, while other time-in-force options may be available. Check these settings when placing your order so you know how it will be handled.

Does after-hours trading affect the open?

After-hours trading can influence expectations for the next market open, but it doesn't determine the opening price. Prices can continue to change overnight and during pre-market trading as new information and more orders enter the market. 

For example, a stock may rise after an earnings announcement in the after-hours session but open at a different price the next day. This can happen as more buyers and sellers enter the market and react to company news, economic developments and moves in global markets. 

The opening price reflects the buy and sell orders available when the regular session begins. This means an after-hours price can provide an early indication of how the market is reacting, but the direction or size of the move may change by the opening bell.

When looking at after-hours price movements, it's useful to consider trading volume and the bid-ask spread, as lower liquidity can have a greater influence on the prices shown.

What is 24/5 trading?

24/5 trading gives you access to selected stocks and ETFs for most of the day, five days a week. It extends beyond standard pre-market and after-hours sessions, making it possible to trade at additional times during the working week.

Availability depends on your broker or trading platform, and 24/5 trading doesn't mean that every stock is available around the clock. Platforms typically offer it for selected stocks and ETFs, with their own trading hours and order requirements.

The additional hours can give traders more flexibility to respond to company news, global market developments or earnings announcements, particularly when trading from different time zones.

As with other extended-hours sessions, trading conditions can differ from regular market hours. Activity may be lower at certain times, which can affect liquidity, bid-ask spreads and the prices available.