CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.00% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Traders are always on the lookout for opportunities to make the most of market volatility. Out-of-hours trading is an extended period of trading that takes place outside the standard session. Previously available only for institutional investors, out-of-hours trading was introduced to individuals in June 1999 by NASDAQ, the world’s busiest exchange. Now, many exchanges around the world offer this.
After-hours trading is carried out virtually via electronic communication networks (ECN) when the exchange remains closed.
Trading sessions outside the working hours of an exchange are classified as:
Also called the after-hours session, this lasts for a few hours after the exchange has closed for the trading day. The number of hours is different for different exchanges.
The pre-market session begins at dawn, around 5:00am, and closes when the trading day begins. See table below for more details.
Weekend sessions are short-duration sessions that allow out-of-hours trading for a few hours on Saturdays and/or Sundays. Some exchanges open special trading sessions on festivals. These fall under this category as well.
Here are the pre- and post-session timings of the most popular exchanges:
| Exchange | Pre-Market Timings | Post-Market Timings |
| NASDAQ (USA) | 4am to 9:30am EST | 4pm to 8pm EST |
| NYSE – New York Stock Exchange (USA) | 4am and 9:30am ET | 4pm to 8pm ET |
| LSE – London Stock Exchange (UK) | 5:05am to 7:50am GMT | 4:40pm to 5:15pm GMT |
| Shanghai Stock Exchange (China) | 9:15am to 9:25am JST | NA |
| Bombay Stock Exchange | 9:00am to 9:15am IST | 3:40pm to 4:00pm IST |
Traders can use the off-hours to get ahead in the game. Here are some advantages of trading off-hours.
Financial markets react to news like economic data releases, company takeovers, bankruptcy filings, earnings reports. These announcements may be made during market off-hours. Premarket and after-hours trading allow traders to take advantage of the opportunities while the markets digest the news.
The off-peak hours offer more flexibility, as traders can place orders when its most convenience. Often traders find time for analysing charts before or after their working day. Premarket and after-hours trading offers the opportunity to take advantage of price fluctuations beyond their working hours. Premarket trading also allows traders to gauge any overnight change in sentiment.
Experienced traders use the premarket trading hours to plan their trades. For instance, if a trader expects the price of a security to decline, they can sell it ahead of the slump and hedge against losses.
Here are a few things to consider about after-hours trading:
Here are some popular after-hours trading strategies:
After a strong price action in any direction, the market stabilises and there is a period of consolidation. These periods may occur before an important announcement. Such consolidation periods are followed by breakouts, immediately after the announcement, irrespective of whether the trading session is open. Some traders make their move in the off-hours to capitalise on the price movement before other market participates wake up. This way, they can exploit the full span of price movements following the news. Traders typically use Bollinger Bands (BBs) and average true range (ATR) to trade the news.
This is a premarket trading strategy. Often the price of an asset may be different when the market closes one session and opens in the next trading session. There could be many reasons for this, including geopolitical events, company news, and natural calamities. Traders who hold positions overnight run the risk of incurring higher losses than their risk management technique is set at. Seasoned traders use the off-hours to hedge against the losses they may not be able to control when the market opens.
Events such as acquisitions and bankruptcy filings often take place on the last working day of the week. Stock prices may become highly volatile when the market opens next Monday, especially when the events deviate significantly from expectations. Traders who can speculate a wide price gap and higher volatility may take positions over the weekend.
Trading during regular and out-of-hours involves some amount of risk. Therefore, traders must practise on a demo account and develop a strong risk management plan before trading the live markets.
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