How exactly does after hours trading work?

[TheBullPicker]

Say I put a limit order for a stock at say 10PM. I say Buy limit $5.00, and the stock happens to be at $4.95 when I enter that. Will I get that stock in the morning for five even if pre-market/afterhours the price raises up. Say after this raise, it opens at $5.01, and my limit is still at $5.00 Will I get the stock or not?
So another question I guess would be, does it matter if I enter my buy order at 3:01 PM or 8:29, will I pay the opening price either way, or will I be able to use the limit buy to get whatever price it happens to be at after hours.

I need any king of help I can get, as I am a fairly new trader.
Thanks

[wallnut]

you asked it much better than I did, I cant seem 2 get a straight answer from anyone. everyone I ask comes to the exact same conclusion, ignor it
so I would also appreciate the, after hours tradeing for dummies version.

[madcowdisease]

I have zero experience in afterhours trading. My understanding is that it works by limit order only, which makes the Cramer Effect even more frustrating knowing people are to blame and not the brokers trading in house to get dual comissions or due to low volume (kinda to blame).

When you put in your limit order your broker will try and match you up with an appropriate seller. Due to the low volume you may not get orders filled.

I don't really understand your question about 3:01, do you mean 4:01? Or are you just in the Central Timezone or something?

My advice is to stay away from afterhours trading. The only reason I could think for someone on this site to desire to trade afterhours is to partake in the Cramer Effect. That is a precarious situation I would stear clear of. You're dealing with fools out there man and you'll end up paying a ridiculous price and get taken. Save your $ and remain disciplined and you'll be fine.

[TheBullPicker]

yes I am central time. sorry about the confusion. Anyone have any knowledge on the topic, because I can't really trade during the day, and rely 100% on trading while the market isn't open. Any advice would be appreciated.

[Mad Girl Investor]

My experience is:

I placed an order one night about 7 pm, and it was a limit,not to exceed XX amount. Within a few minutes it was filled. I am on Ameritrade, which they offer extended hours trading til 8 pm EST. So, tho the volume is low, they did find a seller for my buy.

You can place the order at, say, 4 AM, but if your particular broker doesnt offer service at that time,which I dont think any of em do, youd basically have to wait til the market opens. Since there are dips and gap ups inthe early am trading, you might get the price you want.

Remember, the broker is the middle man between buyer and seller, so at 4am it might be hard to find a seller for your buy...and it mightbe harder to find a brokerage who works in the middle of the night.

Just put your limit buy order in, wait to see if it gets filled since thats all you can do after hours.

Hope this helps you.

[mhertz]

what i don't understand is how a trade can go through at extremes when there is a constant flow of sellers willing to sell at normal prices.

e.g. if company XYZ has traded all day with a bid of $0.02 and an ask of $0.03, I often see a daily high of say $0.20 (i.e. some lemmon missed a decimal place) -- how do these trades get filled if there was a seller willing to sell at $0.03?

[GDFLS]

With Scottrade you can only do after hours/pre market LIMIT orders. Here are the time frames you can do off hour trading with Scottrade:

Pre-market trade between 8:00 AM and 9:15 AM Eastern Time.

Exteneded hours trade between 4:15 PM and8:00 PM Eastern Time.

Now I have to specifiy that I want to trade during these times, if I just enter an order in the normal trade screen, say at midnight or over the weekend it will be on hold til the next market open.

Hope that helps, even a lil bit

[GDFLS]

what i don't understand is how a trade can go through at extremes when there is a constant flow of sellers willing to sell at normal prices.

e.g. if company XYZ has traded all day with a bid of $0.02 and an ask of $0.03, I often see a daily high of say $0.20 (i.e. some lemmon missed a decimal place) -- how do these trades get filled if there was a seller willing to sell at $0.03?

Yeah now thats a good question, who is the lucky stiff who gets his sell order filled with a fat finger buy order?!

[mhertz]

that's what i want to find out (similarly, buying at extremely low prices)

[aj14]

Yeah now thats a good question, who is the lucky stiff who gets his sell order filled with a fat finger buy order?!

Me!

I always put silly buy and sell orders in the market during the off hours...and invariable some knuckle head will enter a market order when my offer is $1.00 above or below the "right" price, and I will make a silly sale or purchase....

The moral of the story?
You should always trade with limit orders. Never, ever put a market order in. If you miss something, so what, go on to the next, or wait for the stock to come down. If things are a good long term buy, you'll have plenty of chances to buy them. Playing the "chase Cramer's tout of the day" game is a sure way to lose all your money...fast!

[pmb1010]

do they charge a premium to sell/buy pre- or after market?

(I use Fidelity) - The text infers that they do.
I have the capability - but not the guts yet, to put anything out there.
There are tons of scare warnings & text about placing orders and the risks involved.

I know it's only money, but I know what happens in regular trading, not so sure what REALLY happens pre-&after hours though. Guess I'll have to give a wild sell order a try sometime. Do they simply expire at the end of after market hours, like regular limit orders do when you pick "day"?

[knowitall]

Say I put a limit order for a stock at say 10PM. I say Buy limit $5.00, and the stock happens to be at $4.95 when I enter that. Will I get that stock in the morning for five even if pre-market/afterhours the price raises up. Say after this raise, it opens at $5.01, and my limit is still at $5.00 Will I get the stock or not?
So another question I guess would be, does it matter if I enter my buy order at 3:01 PM or 8:29, will I pay the opening price either way, or will I be able to use the limit buy to get whatever price it happens to be at after hours.

I need any king of help I can get, as I am a fairly new trader.
Thanks


The after hours markets are very illiquid. You are not held to time and sales like you would be when the market is open. Some of the activity is on ECNs, other activity is on regional exchanges. For example, a lot of listed stocks trade after hours on the Pacific Exchange. Most OTC stocks trade on ECNs (mostly Instinet since the NASDAQ bought Instinet). OTC stocks also can trade on regional exchanges, the most common one I see is the National Stock Exchange (aka Cincinnati Exchange). Also, your broker/dealer can act as principal and sell shares from their inventory or buy shares from you to add to their inventory.

Your broker/dealer can also engage in a riskless principal transaction.....
for example, say I am selling 100 shares of ABCD and you are buying 100 shares and are equivalent to the highest bid currently on the stock. The firm can cross our orders. I would sell my shares to you.

[madcowdisease]

OTC stocks also can trade on regional exchanges, the most common one I see is the National Stock Exchange (aka Cincinnati Exchange).

Let's hear it for the Nasty 'Nati. Who Dey?

[knowitall]

Let's hear it for the Nasty 'Nati. Who Dey?

http://www.nsx.com/

all you need to know about them it here...