Is 24 Hour On-Line Stock Trading Available?
Internet brokers and electronic trading systems have enabled around-the-clock stock trading. Online brokerage services allow clients to place orders any time they please, though most services only execute the orders during normal trading hours. A few online services offer accounts that follow global markets as they open, allowing for trades nearly 24 hours a day while electronic communication networks (ECNs in the finance world) pair buyers and sellers around the clock outside of exchanges.
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After-Hours Trading
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Trading outside of the New York Stock Exchange's and NASDAQ's hours of operation (9:30 a.m. to 4 p.m., eastern time) is called after-hours trading. After-hours trading is not a new phenomenon, according to the Securities and Exchange Commission, but the activity has become widespread since communication developments allowed individuals to trade online from their homes.
24-Hour Accounts
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While dozens upon dozens of online trading companies and brokerage accounts exist, most place trades during regular exchange hours. A few, however, offer services that let clients place trades on exchanges outside of the United States, allowing for 24-hour trading. However, no major exchange operates on the weekends.
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ECNs
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ECNs connect buyers and sellers privately using electronic marketplaces that never close, to some degree cutting out the need for public exchanges. However, SEC rules state that anyone executing a trade must be licensed, meaning that private individuals must open an account with a broker-dealer subscriber to an ECN.
Considerations
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The SEC states that after-hours trading carries more risk and less flexibility than trading during normal hours. First, prices are not as well-reported when the major exchanges are closed, and often fluctuate more. Secondly, fewer people trade when the New York Stock Exchange especially is closed, which means fewer buyers and sellers. Third, transactions often take longer after-hours, which means that you could end up on the wrong side of price fluctuations.
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References
- Securities and Exchange Commission; Electronic Communication Networks; June 2007
- Securities and Exchange Commission: After-Hours Trading -- Understanding the Risks; November 2008
- "CNN Money": 24 Hour Stock Market and Forex Data
- Simple Stock Trading: 24 Hour Stock Trading
- Quality Books Online: 24 Hour Trading Canada
- Photo Credit Jupiterimages/Goodshoot/Getty Images
