Part 31: Extended-Hours Trading, Pre-Market Trading, and After-Hours Trading

When investing, it’s important to understand the working hours and days of the exchanges to plan your investments effectively.

As we know, securities can be bought or sold on stock exchanges during their trading hours. You need to know the trading hours of the exchange where the security you wish to buy is listed. For example, if you want to buy shares of Apple*, you must follow Nasdaq’s trading hours, as Apple’s shares are listed on that exchange.

In addition to Saturdays and Sundays, exchanges have non-working days when they are closed due to national holidays or other significant events in the country.

At the beginning of each year, we post the working hours and holiday lists for the exchanges accessible through our application in the “Q&A with Apricot” section of our website.

What Is Extended-Hours Trading?

Extended-hours trading is when trading of securities takes place outside of an exchange’s regular business hours. This period is divided into two main phases.

• Pre-Market Trading, when trading takes place before the exchange opens (e.g., in the US, from 4:00 AM to 9:30 AM Eastern Time Zone).
• After-Hours Trading, when takes place after the exchange closes (e.g., in the US, from 4:00 PM to 8:00 PM Eastern Time Zone).

It’s important to note that not all stock exchanges offer extended trading hours. However, they are common on the largest exchanges, including the NYSE, Nasdaq, and the London Stock Exchange.

This flexibility enables institutional and international investors to respond swiftly to significant news, such as company earnings reports or government-released economic indicators, published while the market is closed.

Extended-Hours Trading Characteristics and Risks

Trading during extended hours differs significantly from trading during regular hours, particularly from a risk perspective.

• Liquidity Risk | Fewer investors (primarily professionals) participate in trading during extended hours, which means liquidity is lower.
• Volatility Risk | Due to lower liquidity, price fluctuations (volatility) can be more abrupt.
• Price Difference (Spread) | The difference between the buyer’s and seller’s price (the Bid-Ask Spread) can be wider during these hours than during regular hours.
• Availability | Not all stocks are available to trade during extended hours.

How to Trade During Pre-Market and After-Hours

Extended-hours trading is available through Apricot Capital for exchanges that offer such trading.

During these times, you can log in to our application and select the security you want to buy or sell. The key difference is that, rather than placing a market order, you must place a limit order and specify the maximum or minimum price at which you are willing to buy or sell that security.

Extended-hours trading can benefit investors who want to act quickly in response to unexpected business events or news. However, it carries significant liquidity risks. Unless you have a clearly defined strategy, it’s better to avoid this type of trading.

Apricot Capital is regulated by the Central Bank of Armenia.

*The examples in this text are for illustrative purposes only. This does not constitute investment advice or a recommendation to buy or sell any specific investment instrument. The past performance mentioned in this text is not indicative of future results.