Extended-hours trading (or electronic trading hours, ETH) is
stock trading that happens either before or after the
trading day of a
stock exchange
A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments. Stock exchanges may also provide facilities for th ...
, i.e., pre-market trading or after-hours trading.
After-hours trading is the name for buying and selling of
securities when the major markets are closed. Since 1985, the regular trading hours for major exchanges in the United States, such as the
New York Stock Exchange and the
Nasdaq
The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second ...
stock market, have been from 9:30 a.m. to 4:00 p.m.
Eastern Time (ET). Pre-market trading occurs from 4:00 a.m. to 9:30 a.m. ET, although the majority of the volume and liquidity come to the pre-market at 8:00AM ET.
After-hours trading on a day with a normal session occurs from 4:00 p.m. to 8:00 p.m. ET.
s and specialists generally do not participate in after-hours trading, which can limit liquidity.
Trading outside regular hours is not a new phenomenon but used to be limited to high-net-worth
investors and
institutional investor
An institutional investor is an entity which pools money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, government-linked co ...
s like
mutual funds. The emergence of private trading systems, known as
electronic communication networks (ECNs), has allowed individual investors to participate in after-hours trading. Pre-market trading and after-hours trading is all processed through ECNs including
NYSE Arca.
Financial Industry Regulatory Authority (FINRA) members who voluntarily enter quotations during the after-hours session are required to comply with all applicable limit order protection and display rules (e.g., the
Manning rule The term Manning rule is the informal name for a financial industry rule in the United States: Financial Industry Regulatory Authority (FINRA) regulation, Rule 5320. It prohibits a FINRA member firm from placing the firm's interest before/above the ...
and the
SEC order handling rules).
See also
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Trading day
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Stock exchange halts and suspensions
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List of stock exchanges
This is a list of major stock exchanges. Those futures exchanges that also offer trading in securities besides trading in futures contracts are listed both here and in the list of futures exchanges.
There are sixteen stock exchanges in the world ...
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List of stock exchange trading hours
References
External links
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Share trading
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