Extended Hours on Vested gives you access to an additional 9.5 hours of trading on each trading day.
Regular market hours (or core-market hours) are open between 9:30 AM ET to 4:00 PM ET. Extended Hours refer to the periods of time before and after core-market hours, where the pre-market trading hours extend from 4:00 AM ET to 9:30 AM ET, and after-hours trading extends from 4:00 PM ET to 8:00 PM ET. The rules for trading during these extended sessions may differ from those during the core trading session and may not be suitable for all investors.
Figure. Pre-market and after-hours trading sessions
Key benefits of Extended Hours Trading
- Trade Conveniently
Increased access to trading globally from any timezone.
- React faster to news events and company earnings
Most companies announce their earnings or material news events before the market opens or after the market is closed. These announcements could cause significant movements in the company’s stock price outside core market hours.
- Activity in foreign markets
Extended hours trading enables you to capture potential opportunities from foreign market activity, such as those in Asia or Europe, that occur outside core market hours and impact the US markets.
Important Risk Considerations for Extended Hours Trading
- Lower liquidity
The trading volume during extended hours is generally much lower than during core market hours, making it more difficult to buy or sell shares at the desired price.
- Price volatility and wider spreads
Less trading volume often creates an environment for greater volatility in prices and wider bid-ask spreads (the difference between the price at which a security can be purchased and the price at which it can be sold), where prices can move drastically in a short amount of time, making it harder to execute orders at favorable prices.
- Unlinked markets
During core market hours, quotes and last-sales reports are consolidated across all Electronic Markets (“EMs”), while quotes and prices during Extended Hours Trading only represent the best prices available through participating EMs, which may vary widely from one EM to another.
- News announcements
Most companies announce their earnings or material news events before the market opens or after the market is closed. These announcements, combined with lower liquidity and higher volatility, may cause significant and unsustainable movements in the company’s stock price.
- Professional Competition
Many traders participating during pre-market and after-hours sessions are professionals associated with large institutions and may have access to more information than individual investorsAdditional information about the risks associated with Extended Hours Trading is available from the SEC at Post Market Trading: Understanding the Risks.
How can I place an order for Extended Hours Trading?
You can make a trade eligible for execution during extended hours by turning on the toggle for it when placing an order. You always retain control of the toggle (which remains off by default) for each order you enter.
Figure. Toggle for Extended Hours when placing an order
Any trades designated for Extended Hours Trading (toggle on) will be available for execution during that trading day (4:00 AM ET – 8:00 PM ET, including pre-market, core market hours, and after-hours). If the toggle is off, the order will be queued for the following or ongoing core market session (9:30 AM ET – 4:00 PM ET).
When does an order that is eligible for Extended Hours get executed?
Once an order is placed, it will attempt to be executed in the current trading session.
For example, if the order is placed during the pre-market session, it will attempt to be executed during the pre-market session. If the order is not fully executed, the order will roll over to the next session (core market hours in this example). The order will roll over to the after-hours session if it is not fully executed during core market hours.
Orders that are placed outside of all trading sessions (8:00 PM ET – 4:00 AM ET) will be queued for execution at the start of the next pre-market session at 4:00 AM ET.
What order types are eligible for Extended Hours Trading on Vested?
Market orders for both notional (dollar amount-based fractional orders) and whole share orders are eligible. Limit orders are eligible for whole shares only. For more information on types of orders, please refer to our broker partner DriveWealth’s Trading Disclosures.
What happens to orders that do not get executed during pre-market or after-hours?
Both limit and market orders that are eligible for execution in Extended Hours will be canceled at the end of the after-hours session (at 8:00 PM ET) if they are not fully executed during any trading session in the day.
How are Market orders protected against significant price movements (arising from higher volatility and lower liquidity) during Extended Hours?
To help protect you from potential price volatility, Market orders placed during pre-market or after-hours sessions are subject to Market Order Collaring.
What is Market Order Collaring?
All market orders eligible for execution during pre-market or after-hours sessions are converted to limit orders. The limit price for these orders is set at 2.5% above the national best bid and offer (“NBBO”) price at the time the order was submitted for buy orders. The limit price for sell orders is set at 2.5% below the NBBO. Collaring helps cushion against significant price movements and can prevent overspending the available funds in your account.
If the market price stays outside the 2.5% collar, the order will remain pending and be canceled at the end of the after-hours session (for instance, this can happen if the order was entered outside of the core and Extended Hours sessions or during a trading halt, and the market price of the stock drastically changes when the markets open).
Can all available securities on Vested be traded during Extended Hours?
No, not all securities may be available for trading during Extended Hours. The availability of a particular security may vary based on several factors, including the interest in that security during pre-market or after-hours sessions and as would be made available by our broker partner DriveWealth.
Stocks/ETFs that are marked with the above indicator on the Vested platform are available to be traded during Extended Hours. You can find a list of stocks/ETFs available to be traded on Vested during Extended Hours here.
Is Extended Hours Trading available to all Vested users?
Yes, trading during Extended Hours is available to all Vested users.
Extended hours trading disclosures for our broker partner DriveWealth, can be found here.