Can You Trade U.S. Stocks After Market Close? After-Hours Trading Guide and Risk Warnings

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Have you ever wondered if you can still trade U.S. stocks after the market closes? This is exactly what after-hours trading offers. According to the table below, the after-hours trading session runs from 4:00 PM to 8:00 PM U.S. time:

After-hours trading only accepts limit orders, matched via an electronic communication network (ECN), and compared to regular trading, it has lower liquidity and greater price volatility. You will notice that the after-hours market often experiences significant changes due to earnings reports or major news, even impacting the next day’s opening trend. Many beginners wonder: why are there fewer chances of execution? How can you place orders most safely? This article will use bullet points and step-by-step guidance to help you quickly grasp the key aspects of after-hours trading.

Key Points

• The U.S. after-hours trading session runs from 4:00 PM to 8:00 PM EST, which corresponds to 4:00 AM to 9:00 AM Hong Kong time, allowing you to trade stocks even after the market closes.
• After-hours trading only accepts limit orders, not market orders, which helps you control the execution price and reduce risks from price volatility.
• The after-hours market has lower liquidity, fewer execution opportunities, and greater price swings; it’s recommended to prioritize popular stocks and closely monitor volume and price changes.
• Different brokers offer varying levels of support and fees for after-hours trading; choosing a technologically advanced and stable broker can enhance trading efficiency and experience.
• Beginners should start with small amounts of capital, set strict limit orders, leverage broker educational resources, and practice risk management to gradually improve their after-hours trading skills.

What Is After-Hours Trading

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Basic Definition

You can continue trading stocks after the U.S. stock market closes; this is known as after-hours trading. After-hours trading refers to an extended trading session opened to investors after the regular trading hours of major U.S. exchanges (e.g., NYSE, NASDAQ, AMEX). You will find that during this time, investors can still place orders and trade stocks through an electronic communication network (ECN).

The main features of after-hours trading include:

• Only limit orders can be used, not market orders.
• You need to specify that the order is valid for the after-hours session.
• There are limits on the number of orders during after-hours trading, with a maximum of 25,000 shares per order.
• You can modify or cancel unexecuted orders at any time.
• After-hours trading applies to most U.S.-listed stocks.

You will notice that after-hours trading typically has lower liquidity and greater price volatility. When a company releases earnings reports or major news, the after-hours trading volume tends to increase significantly. At such times, professional investors and experienced users tend to participate more actively. If you are a beginner, it’s recommended to first observe market conditions and gradually understand the characteristics of after-hours trading.

Relationship with U.S. Market Close

The U.S. stock market closes at 4:00 PM EST. After the close, the after-hours trading session begins and runs until 8:00 PM. You can refer to the table below to understand the after-hours trading times for different markets and time zones:

When you participate in after-hours trading after the U.S. market close, you will notice that the trading volume is significantly lower than during regular trading hours. However, according to Charles Schwab statistics, some popular stocks remain active during extended trading hours, especially between 8:00 PM to 9:00 PM and 3:00 AM to 4:00 AM EST. The trading volume during these periods can even be twice that of other publicly reported trading service providers. This indicates that while overall liquidity in after-hours trading is lower, there are still higher execution opportunities during specific periods and for specific stocks.

You need to note that after-hours trading has greater price volatility, with more professional investors involved, so retail investors should be particularly cautious when participating. You can use after-hours trading to respond to breaking news, earnings releases, or adjust your portfolio, but it’s recommended to first familiarize yourself with the rules and risks before gradually participating.

After-Hours Trading Times

U.S. and Hong Kong Times

You can still participate in after-hours trading after the U.S. stock market closes. The official after-hours trading session runs from 4:00 PM to 8:00 PM EST. For Hong Kong investors, this corresponds to 4:00 AM to 8:00 AM during summer time and 5:00 AM to 9:00 AM during winter time. This period allows you to react instantly to U.S. stock market fluctuations, especially when companies release earnings reports or major news. The extension of night trading hours attracts more institutional investors, increasing market activity. However, liquidity is lower during the early morning hours, with limited participants, which may lead to greater price volatility. If you choose to trade during these times, you need to pay special attention to trading volume and price changes.

Tip: While night trading increases trading opportunities, the risks also rise during significant international market volatility. It’s recommended to closely monitor market news and schedule your trading times reasonably.

Broker Support

The after-hours trading support periods may vary slightly among different brokers. Most mainstream brokers support after-hours trading from 4:00 PM to 8:00 PM after the U.S. market close. Some brokers even offer 24-hour trading services, but the official after-hours session remains 4:00 PM to 8:00 PM. You can choose a broker based on your needs. In recent years, brokers have actively introduced advanced technology solutions, such as Changqiao Technology and Whale systems, which feature high performance and low latency, enhancing trading efficiency and user experience. Through digital transformation, brokers have optimized backend operations, providing you with a more stable and secure trading environment. Market feedback shows that these technological supports have effectively improved brokers’ operational efficiency and service quality.

• When choosing a broker, it’s recommended to pay attention to their after-hours trading support hours, system stability, and associated fees.
• Technologically advanced brokers can offer faster quotes and lower trading latency, improving your overall investment experience.

After-Hours Trading Operations

Order Placement Methods

During after-hours trading, you can only use limit orders. Market orders are not available during this session. Limit orders allow you to set the maximum or minimum price for buying or selling, helping you control the execution price and reduce risks from market volatility. You also need to select the after-hours trading mode and specify an ECN (electronic communication network) for order matching. Different broker platforms offer various ECN options, such as ARCA or EDGX. When placing an order, make sure it is designated for after-hours trading, or the order may not be executed.

Tip: During after-hours trading, it’s recommended to set reasonable limit prices to avoid non-execution due to excessive price jumps.

Common after-hours trading tools and platforms include:

• De Shin Order Master: Provides a comprehensive after-hours database, real-time and historical quote inquiries, technical analysis indicators, industry structure analysis, real-time news, stock screening functions, and a personalized trading interface.
• De Shin Mobile Trader: Supports iPhone, iPad, and Android, allowing you to monitor and trade anytime, anywhere.
• Voice Order Placement: Supports intraday, after-hours, cash, and margin trading orders, with execution reports, order inquiries, and order cancellation functions.
• Wealth Builder Platform: Combines monitoring and trading, suitable for beginners and experienced online traders, offering real-time monitoring, historical transaction inquiries, and margin status checks.
• Investor Wealth System: Emphasizes fast and stable order placement, with active order features, execution reports, real-time settlement amount calculations, and credit maintenance rate inquiries.

These tools can help you improve after-hours order placement efficiency and decision-making accuracy.

Platform Steps

When conducting after-hours trading on a mainstream broker platform, you can refer to the following basic steps:

1. Log in to your broker trading platform.
2. Search for the stock ticker you want to buy or sell.
3. Select “limit order” as the order type.
4. Enter the price and quantity you hope to execute.
5. Choose the “after-hours trading” or “extended hours” mode and specify an ECN (e.g., ARCA).
6. Confirm the order details are correct, then submit the order.
7. You can check the execution status on the order inquiry page anytime, and modify or cancel unexecuted orders.

Note: The interfaces of different broker platforms may vary slightly, but the general process is similar. You can refer to the broker’s tutorial videos or operation guides to improve your proficiency.

Execution Considerations

During after-hours trading, you must pay special attention to the lower execution opportunities. The liquidity in the after-hours market is significantly lower than during regular trading hours, with limited buy and sell orders, which can result in wider bid-ask spreads. After you place an order, it may not be executed immediately or may not be executed at all.

• During after-hours trading, popular stocks (e.g., Apple, Tesla) have higher execution chances, while less popular stocks are harder to trade.
• You should closely monitor trading volume and price changes to avoid placing orders when liquidity is extremely low.
• If major news or earnings reports are released, after-hours price volatility will increase; it’s recommended to set strict limit orders to control risks.

Tip: You can use your broker platform’s real-time quotes and historical data to assess current market activity and choose the right timing to place orders.

By mastering the correct order placement methods, familiarizing yourself with platform operation steps, and paying attention to liquidity and price volatility, you can participate in after-hours trading more safely.

After-Hours Trading Risks

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Liquidity

During after-hours trading, you will notice that market liquidity is significantly lower. The number of participants decreases, and trading volume drops, making it harder for your orders to be executed. Taking TSMC dollar bonds as an example, the initial daily average trading volume was about 10 billion TWD, but after one month, it dropped to 1 to 1.5 billion TWD. In contrast, TSMC stocks had an average daily trading volume of 50 billion TWD over the past year. These figures show that in a low-liquidity market, execution opportunities are greatly reduced.

Tip: When placing orders during after-hours sessions, it’s recommended to choose popular stocks, which are more likely to be executed.

Spread and Volatility

The bid-ask spread in the after-hours market is usually larger, and price volatility is more pronounced. You can refer to the table below to understand the spread situations for different assets:

You will notice that when liquidity is low, the bid-ask spread widens, and execution prices are prone to significant fluctuations. This directly impacts your trading costs and risks.

Fees and Restrictions

During after-hours trading, you can only use limit orders, not market orders. Some brokers may charge additional fees for after-hours trading, such as an extra 0.5 to 1 USD per trade, with actual fees varying based on broker policies and exchange rates. Additionally, some brokers impose limits on the number of shares per order, such as a maximum of 25,000 shares. Before placing an order, you should carefully review the broker’s rules and fee standards.

Note: If you overlook these restrictions, it may increase your trading costs or cause you to miss execution opportunities.

Practical Tips

Risk Management

When participating in after-hours trading, you must prioritize risk management. The after-hours market has high volatility and low liquidity, making extreme price movements likely. You can refer to the following methods:

1. You should use after-hours time to do your homework, review the day’s trading results, and analyze the reasons for successes and failures. This will help you optimize your strategy for the next trading day.
2. You need to understand the high-risk nature of short-term trading and allocate your funds reasonably. Don’t invest all your capital in a single stock; set stop-loss points based on your risk tolerance.
3. You can learn technical analysis and chip movement trends to improve your judgment. Many experts recommend that beginners use moving average logic and data statistics, which can help reduce losses.
4. The experience of Zhuang Dad is worth referencing. He suffered significant losses due to blind trading but later self-taught technical analysis and strictly enforced trading discipline, successfully earning millions of dollars in five years. This example highlights the importance of discipline and risk management.

Tip: Before placing each order, you should set limit prices and stop-loss points to avoid making wrong decisions due to emotional fluctuations.

Beginner Tips

When you first start participating in after-hours trading, it’s recommended to adopt the following strategies:

• You can start with a small amount of capital to test the waters and gradually become familiar with the characteristics of the after-hours market.
• You should set strict limit orders to avoid buying high or selling low due to price swings.
• You can choose to trade after major news releases or during periods of higher liquidity, which increases the likelihood of execution.
• You should leverage your broker’s educational resources, such as online courses, tutorial videos, and simulation trading platforms, to continuously enhance your investment knowledge and practical experience.

Remember: You need to maintain a learning mindset, regularly review your trading records, so you can grow steadily in the after-hours market.

Additional Resources

Broker Tutorials

If you want to improve your after-hours trading skills, you can make full use of the educational resources provided by brokers. Yuanta Securities has publicly released a wealth of trading tutorials and data analysis materials to help you quickly grasp market dynamics. You can find the following content on their official website:

• Real-time news and fund flows, keeping you updated on market changes.
• Buy/sell force analysis and margin trading, assisting you in judging market trends.
• Market institutional movements, support/resistance levels, and candlestick charts, facilitating technical analysis.
• Global stock market information and industry prosperity classifications, helping you understand the performance of different markets.
• Listed/over-the-counter quote tables, revenue/profit, closing price rankings, and trading volume/value rankings, aiding in comparing individual stock performance.
• Institutional movements, major player inflows/outflows, after-hours trading, and odd-lot trading, providing more trading details.
• Video tutorial resources covering warrants, bull/bear certificates, and ETN zones, suitable for investors of different levels.
• Other educational materials include fundamental analysis, technical analysis candlestick charts, financial analysis, director/supervisor holdings, dividend policies, and major event calendars.

You can access these materials anytime via Yuanta Securities’ official website to enhance your after-hours trading knowledge and analytical skills.

Advanced Reading

If you want to further understand after-hours trading, you can refer to the following advanced resources:

1. Research the official websites of major U.S. exchanges (e.g., NYSE, NASDAQ), which regularly update after-hours trading rules and the latest announcements.
2. Read professional investment books, such as Introduction to U.S. Stock Investing and Practical Technical Analysis, which provide detailed insights into after-hours trading strategies and risk management methods.
3. Participate in online courses or webinars, as many brokers and financial institutions regularly offer free tutorials covering after-hours trading operations, technical analysis, and market trends.
4. Follow financial news websites and professional analysts’ social media accounts, which provide real-time updates on after-hours market dynamics and expert opinions.

By leveraging these resources, you can continuously enhance your investment knowledge, giving you more confidence and competitiveness in after-hours trading.

You can still participate in after-hours trading after the U.S. stock market closes, offering you greater flexibility. After-hours trading is suitable for investors who need to react immediately to market news or have specific strategies. Beginners should pay special attention to liquidity and price volatility risks. You can make full use of broker educational resources to continuously improve your investment knowledge, boosting your confidence in the market.

FAQ

Can After-Hours Trading Use Market Orders?

During after-hours trading, you can only use limit orders. Market orders are not available. This helps you control the execution price and reduce risks.

Are There Minimum or Maximum Order Quantity Limits for After-Hours Trading?

Most brokers impose a maximum order limit per trade, such as 25,000 shares. You should check the broker’s rules before placing an order to avoid exceeding limits.

Are After-Hours Trading Fees Higher?

Some brokers may charge additional fees for after-hours trading, such as an extra 0.5 to 1 USD per trade, with actual fees depending on broker policies and exchange rates.

Can After-Hours Trading Be Used for All U.S. Stocks?

You can trade most U.S.-listed stocks after hours, but some less popular or low-liquidity stocks may not be available for after-hours trading.

Is the Execution Speed Slower in After-Hours Trading?

When placing orders during after-hours sessions, the execution speed is usually slower. Market liquidity is low, with fewer buyers and sellers, so orders may not be executed immediately.

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