4 ms·

A limited set of professional traders can trade after hours but retail traders cannot. Why not just switch to 24-hour trading?

by Osiris 6y ago

Jaygles 6y ago
I've always been curious about this aspect of the markets. Is there a good reason for this special status/ability? From my naive point of view, it just looks like a small group of people are allowed to game the market by reacting to news that occurred during off hours before everyone else.
- mikestew 6y ago
  Look at the link in my sibling comment before stomping off mad about the 1%. You, too, can massively increase your risk by trading after-hours simply by opening a Fidelity account. I highly recommend that you not do that.
mikestew 6y ago
...but retail traders cannot I generally stay away from after-hours trading, but I would have sworn I'd traded after-hours on Fidelity in the distant past, so I looked it up: "At Fidelity, you can trade listed equities and OTC equities—excluding pink sheets and bulletin board stocks (i.e., those that are not listed on an exchange)—during extended hours." https://www.fidelity.com/viewpoints/active-investor/extended-hours-trading https://www.fidelity.com/viewpoints/active-investor/extended... Why not 24/7 trading? Because after-hours aren't going through the "markets", but through Electronic Communication Networks (ECNs). The rules are different (Fidelity requires all orders to be limit orders, for example). So the best summary answer I can give is: "it's not 24 hours because normal trading and after-hours trading are on separate platforms, rather than after-hours being an extension of normal trading".
- perl4ever 6y ago
  >after-hours aren't going through the "markets", but through Electronic Communication Networks (ECNs) I wasn't aware of all the differences, but I think another more abstract answer to the question of "why not 24/7" is that the whole point of a "market" is to bring people together to trade, and 24/7 would reduce liquidity. I remember reading that volume is very much not evenly distributed through the day so one might ask why not reduce the hours instead, have like an hour to trade in the morning and an hour in the afternoon...
perl4ever 6y ago
Retail traders can trade in the AM and PM sessions. Maybe there is some additional privilege of professionals, but anyone can trade before and after the regular session.

A limited set of professional traders can trade after hours but retail traders cannot. Why not just switch to 24-hour trading?

by Osiris 6y ago

A limited set of professional traders can trade after hours but retail traders cannot. Why not just switch to 24-hour trading?

Jaygles 6y ago

I've always been curious about this aspect of the markets. Is there a good reason for this special status/ability? From my naive point of view, it just looks like a small group of people are allowed to game the market by reacting to news that occurred during off hours before everyone else.

mikestew 6y ago
Look at the link in my sibling comment before stomping off mad about the 1%. You, too, can massively increase your risk by trading after-hours simply by opening a Fidelity account. I highly recommend that you not do that.

mikestew 6y ago

...but retail traders cannot I generally stay away from after-hours trading, but I would have sworn I'd traded after-hours on Fidelity in the distant past, so I looked it up: "At Fidelity, you can trade listed equities and OTC equities—excluding pink sheets and bulletin board stocks (i.e., those that are not listed on an exchange)—during extended hours." https://www.fidelity.com/viewpoints/active-investor/extended-hours-trading https://www.fidelity.com/viewpoints/active-investor/extended... Why not 24/7 trading? Because after-hours aren't going through the "markets", but through Electronic Communication Networks (ECNs). The rules are different (Fidelity requires all orders to be limit orders, for example). So the best summary answer I can give is: "it's not 24 hours because normal trading and after-hours trading are on separate platforms, rather than after-hours being an extension of normal trading".

perl4ever 6y ago
>after-hours aren't going through the "markets", but through Electronic Communication Networks (ECNs) I wasn't aware of all the differences, but I think another more abstract answer to the question of "why not 24/7" is that the whole point of a "market" is to bring people together to trade, and 24/7 would reduce liquidity. I remember reading that volume is very much not evenly distributed through the day so one might ask why not reduce the hours instead, have like an hour to trade in the morning and an hour in the afternoon...

perl4ever 6y ago

Retail traders can trade in the AM and PM sessions. Maybe there is some additional privilege of professionals, but anyone can trade before and after the regular session.