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What are the risks of Extended Hours Trading?

While Extended Hours Trading allows greater flexibility for your trading, there are additional risks that investors should be aware of. When compared to regular trading hours, Extended Hours typically have lower liquidity, with lower likelihood of order execution. It is possible your order may be partially filled, or not at all executed, even if your limit price is met or exceeded.

Due to the lower number of participants trading during extended hours, there are often larger bid/ask spreads, which means there is a larger gap between where buyers are willing to buy (bid) and sellers are willing to sell (ask). Additionally, the limited number of participants can result in increased volatility, with drastic and rapid price swings. It is important to note that prices during the Extended Hours may not reflect the price of the stock in the following regular trading session. News stories released during extended hours may have a greater impact on a stock's price than news stories released during the regular trading session.

Please note, Extended Hours Trading may not be suitable for everyone. For more information, you can view DriveWealth's Extended Hours Trading Disclosures here.