Traditionally, the markets are open from 9:30 AM to 4 PM ET during normal business days.
With extended-hours trading, you can also trade during our extended hours, which give you an extra 6 ½ hours of trading, every single trading day.
This means that market hours are 9:30 AM–4 PM ET, while extended hours are 7–9:30 AM ET and 4–8 PM ET.
Extended hours trading gives traders the ability to react to events that occur outside of regular market hours, such as earnings announcements and activity in foreign markets.
However, just because you can trade in these sessions doesn't always mean you should. It's up to you to understand the risks involved, including higher volatility.
Here are some potential reasons to trade during extended hours.
The companies you own shares of may announce quarterly earnings before or after the market closes.
Depending on the outcome, the stock’s price can move much more than it would during the regular-hours session.
With extended-hours trading, you can react to these potential opportunities as they happen.
Foreign markets, such as Asian or European markets, can influence prices on U.S. markets.
Activity on these markets happens outside regular US market hours, and extended-hours trading allows you to look for potential opportunities around these events.
It's important to keep in mind that there are risks to extended-hours trading.
Some of these risks include:
Not all securities are eligible for fractional trading during the extended-hours sessions.
If a security is not eligible, you can either place an order for whole shares or queue a fractional order for the opening of the next regular market hours session (9:30 AM ET).
Robinhood reviews the list of eligible securities on an ongoing basis and eligibility is determined based on liquidity conditions.
In conclusion, Robinhood's extended trading hours give traders the ability to react to events that occur outside of regular market hours.
However, it's important to understand the risks associated with extended-hours trading, including but not limited to lower liquidity, higher volatility, and wider spreads.
As with any investment, it's important to do your research and make informed decisions when trading during extended hours.
Don't forget to grab your free stock worth up to $200 from Robinhood today!