Extended hours trading risks
Extended hours trading for US stocks are exclusively executed on a limit order basis. Read this FAQ to learn more on order execution for extended hours.
Extended hours trading offers more flexibility but comes with increased risks compared to regular trading hours, as outlined below.
Lower liquidity and high volatility
Extended hours trading can result in greater price volatility, lower liquidity, and less competitive prices compared to regular trading hours, potentially leading to unexecuted or partially filled orders.
Larger bid/ask spreads
The spread refers to the difference between the price you can buy and sell a security for. Lower liquidity and higher volatility in extended hours trading may result in wider than normal spreads for a particular security.
Unlinked markets
Prices on our extended hours trading system may not match those on other systems dealing in the same securities, potentially leading to an inferior price for you.
Price discrepancies
The prices of securities traded in extended hours trading may not reflect the prices either at the end of regular trading hours, or upon next day’s open. As a result, you may receive an inferior price when engaging in extended hours trading than you would during regular trading hours.
News and announcements
Issuers often make news or financial information announcements outside of regular trading hours. These announcements, if combined with lower liquidity and higher volatility, may cause an exaggerated and unsustainable price movement.
Extended hours trading might not be suitable for everyone. For more details, review our Risk Disclosure.