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Here at CAPEX, we want our customers to trade on our platform confidently. Whether you are new to the stock market or an experienced trader, we have the resources for you, that’s why we have prepared this guide with everything you need to know about stocks after-hour trading.
We have over 2,000 CFDs on stocks on our platform to choose from for you to trade. We give our customers this many options because we know how important it is to diversify your portfolio and practise your trading strategies on more than one asset.
It is a good idea to look at various stocks and other securities to help you develop your understanding of the market. If a popular stock is on an upward trend, another may follow. But, because the stock market is highly volatile, we encourage you to analyse the fundamentals of whichever stock you choose to trade. This will enable you to have more successful transactions in the long run.
CAPEX has a simple interface suitable for traders and investors at different levels of their trading journey. We operate on the highly recognised WebTrader platform that we use online and free to download mobile apps. We also have the MetaTrader 5 (MT5) that provides a smooth experience and works well if you decide to trade CFDs with us.
We have several charts and alerts available to our customers that allows you to monitor price movements and speculate trends in the market. In addition, this accompanies the many tradable assets we have so customers can make the most out of our features when trading.
We at CAPEX know that you can buy, sell, or hold onto shares of a company in the stock market when you stock trade. If you own some of that stock, then you own a share of the company. Depending on how they’re doing in the market can determine how well the value of your stock is. Other factors like trends and patterns in the stock market come into consideration to determine when the best time to buy or sell your stock is.
At CAPEX, we allow individuals to practice your day trading strategies during the weekday tradable hours with CFDs. In the UK, the opening time is 8 am and the closing time is 4.30 pm, with a couple of minutes break at noon. The time in other major stock exchange cities like New York is usually around 9.30 am to 4 pm, and follows this for the working week of Monday to Friday. But there is after-hours trading, which starts after the regular exchange closes.
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So what are stocks after-hour trading? The after-hours start after the major international stock exchanges have closed. For example, the US after-hours opens at 4 pm, when the New York Stock Exchange would generally shut. The trading sessions can run as late as 8 pm, but at that time, the volume of trades is a lot less than during the day, so it won’t always run for that long.
You can’t trade CFDs after hours on CAPEX, but you can successfully do this with the help of electronic communication networks (ECN). The ECN is a computer-based program that matches buyers to sellers looking to trade after trading hours in the market. It works by allowing traders and investors internationally to connect and sell without a third party broker involved. It adds a level of anonymity that attracts traders, but it can come with access fees and other commission charges.
The ECN is significant because it allows traders to respond quickly to any out of trading hours news announcements like an earnings release or even a social media post from a reputable source. These announcements will then encourage the individual to either buy, sell or hold their stock depending on what patterns and trends they notice.
The amount of stock volume will naturally decrease after 4 pm, but if there is some news that has been released, this could cause an initial spike that the ECN will help deal with. The ECN will display the best bid and ask prices from multiple markets at record speed, making the process more efficient for the stock traders and investors. There is a higher risk when the stock volume is significantly reduced, but with this risk comes the chance to capitalise and make more profit if trading strategies are executed correctly.
As mentioned, when using ECNs, you won’t have to go through a third party, so there is a higher level of privacy than the average broker. This privacy can then encourage confident investors to make higher stock transactions and spend more money. Again it increases the risk of after-hours trading, but it can also mean more money to be made.
Our online platform is full of well-researched features to help our customers develop their techniques when trading CFDs in the stock or other financial markets. We pride ourselves on our CAPEX Academy. It is a space that allows traders and investors to advance their understanding of the financial markets through technical analysis and expert advice. We also have several account types, depending on your trading level, that provide you with even more advanced strategy ideas as your skills continue to develop.
Stock trading after hours can offer some benefits. We at CAPEX looked at some of the key advantages of trading after hours and why you should consider us as the best online trading of stocks.
Volatility for most financial markets is a risk, especially after trading hours. But, you may also be surprised by the number of attractive prices you see for the stocks you’re interested in that you wouldn’t see during the regular trading sessions. With the help of the ECNs, you can jump on this opportunity. You’ve been matched with either the best buyer or seller and can proceed with the trade.
Customers who trade with us at CAPEX vary from experienced day traders to individuals who check in on their investments from time to time. You may be usually busy during the day with other commitments, so stock after hour trading may be right for you. The time is more flexible and convenient for those who don’t have time during the day. But can still benefit from the tools and resources we offer on our platform to assist you on your stock trading journey.
As mentioned, there could be news released after trading hours that could impact the stock market. Many companies are known to release their earnings after the trading session has closed. Reacting quickly before the market opens the next day puts you at an advantage over those who only day trade within the session. However, most order types are restricted. We recommend limit orders so you can still have the upper hand.
Like after-hours trading, there is also the pre-market. The pre-market is a time before the regular trading session begins during the working day. If you’re thinking about the US stock exchange that opens at 9.30 am, the pre-market trading session usually occurs between 8 am and 9.30 am.
Investors use the pre-market to monitor and judge the market’s direction ahead of the regular trading hours. At CAPEX, we keep our customers informed with all the latest stock market news. It is excellent for those who want to take advantage of early news being released or even updates of stocks before the regular trading session. It could include earnings releases and economic indicators, similar to the after-hours market.
The pre-market also uses ECNs to facilitate trading activity. And because of the volatility during this time, traders and investors would be looking for opportunities to make money. It is again suited for those who don’t mind awkward hours like the after-hours, but it is only really hectic if there is some breaking news.
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Generally, after-hour trading and pre-market trading have a lower volume of trades, so there is less liquidity and stock prices are more volatile. It alone will have a massive effect on the stock prices for both the seller and buyer. Limit orders work well in any trades that have taken place outside usual trading hours. It allows you only to execute a buy or sell when the specific price you have set is reached in the stock market, which you can try out as a customer on CAPEX.
When the stock market opens the next day, the specific stock you’re watching may likely not be the same price it was traded at during the after-hours market. Let’s say a stock price decreased in the after-hours due to an announcement; there could be traders and investors who wanted to buy at this reduced price as a result. It then increases the pressure to purchase and can then cause the price to rise dramatically the next day.
The prices you see fluctuate from the after-hours trading, and then the regular trading hours demonstrate how the stock market reacts to new information or even rumours that are released in that time. It adds to the volatility at that time which is more intense than during the day, so it should be approached with caution when trading. Always remember that your capital is at risk, and the trader’s response to the news may not be a reliable reflection of the stock market as a whole.
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Stock after-hours trading has its benefits but it also comes with risk. We’ve highlighted a few key risks below.
Due to the lower trading volume, this can result in a wider spread between the bid price and the ask prices. With the wider spreads, it could lead to traders not being able to execute a trade at their ideal price but settling for what is on offer at the time. Although the ECNs help promptly match buyers to sellers, if there aren’t that many offers available during the after-hours, you’re less likely to get the order you want.
Similarly, with wide spreads, it is harder to convert shares of stock into cash because there are considerably fewer buyers and sellers. The lower the trading activity, the less likely it is of having a successful order execution. In addition, you could be monitoring a specific stock during the regular trading hours, but that may not be available to trade after hours, so it comes as another disadvantage.
If you are an individual investor who wants to sell a stock, it may be more difficult when you come up against large institutional investors. They have access to more tools and resources than a single investor and have more advanced equipment too, so they may beat you to getting to the best buyers before you. In addition, the technology you have may affect your trades with more delays and lags compared to the regular day. More prominent investors may have supercomputers and high tech advancements to help overcome this issue.
There will be more severe price fluctuations in after-hour trading. It can be due to several influences like the low trading volume and when news is being announced. It puts you at a higher risk of losing more money. If you’ve practised different trading strategies, they may not work after hours because of the volatility, so it’s always a good idea to buy and sell the stock with caution. On the other hand, the fluctuations could work in your favour and increase the profit you make. If you decide to trade with us, you can find out which trading strategy works best for you.
At CAPEX, we know that our clients enjoy trading during regular trading hours. We can host high volumes of orders with our advanced online platform. But we also understand that not everyone has time during the day to execute those stock trades. We recommend after-hours trading for added flexibility of trading and react to news announcements that may affect stock prices quickly.
Join CAPEX today, and discover the many resources on our platform to help you choose to stock trade after-hours, including our stocks broker demo account to try trading in those hours before spending and remember to consider the risks involved.