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Extended Hours Trading

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What is Extended Hours Trading?

Extended Hours Trading refers to the periods of time that you are able to trade after the market closes and before the market officially opens. The rules for trading during Extended Hours Trading sessions may differ from the rules during the Core Trading Session. Extended Hours Trading may not be suitable for all investors.


When does Extended Hour Trading occur?

DriveWealth's Extended Hours Trading offering has two components: the Pre-Market Session and Post-Market Session (collectively, the “Extended Hours Trading Sessions”). You must designate a trade for Extended Hours Trading for it to be eligible for execution during these Sessions (according to the terms discussed below), and you do not need to designate a trade for either the Pre- or Post-Market Session specifically.

  • Pre-Market Session

    • The Pre-Market Session is from 4:00am ET to 9:30am ET. Orders will begin to queue for the Pre-Market Session starting after 8:00pm ET on the previous trading day, and will be eligible for execution (along with newly placed orders) during the Pre-Market Session. Any unexecuted or partially filledorders from the Pre-Market Session will automatically roll over into the Core Trading Session and, if still not fully executed, the Post-Market Session.

  • Post-Market Trading Hours

    • The Post-Market Session is from 4:00pm ET to 8:00pm ET, during which new orders may be entered. Additionally, any unexecuted or partially filled orders from the Core Trading Session will automatically roll over into the Post-Market Session. All unexecuted and partially filled orders will be cancelled at 8:00pm ET.

Note: Extended Hours Trading Sessions will not take place on official Exchange holidays and DriveWealth reserves the right to change or modify hours of operation for Extended Hours Trading at any time without prior notice. A DriveWealth Extended Hours Trading Session, or any security traded therein, may be temporarily or permanently suspended without prior notice at any time at DriveWealth’s discretion.


What are the benefits of Extended Hours Trading

Trading before or after the regular trading hours is often limited in volume compared to volumes that occur during regular trading hours when the exchange is open, and often vary based on which asset or security is being traded. Key benefits of Extended Hours Trading are as follows:

  • Provide Partners and their customers with the ability to trade stocks before and after regular market trading hours
  • Increase access to trading in global time zones
  • Access to stocks that may have greater volume during pre-and post-market trading
  • Quick trading action based on breaking news and events that occur outside of regular trading hours.

How does Extended Hours Trading work?

DriveWealth may route trades to nationally recognized Exchanges, lit venues, market makers, and automated trading systems to facilitate Extended Hours Trading. Any trades designated for Extended Hours Trading will be available for execution during that trading day (4:00am ET through 8:00pm ET counting Core and Extended Hours Trading); any order placed outside of that time will be eligible for execution starting at 4:00am ET the next trading day. Once an order is placed, DriveWealth will attempt to execute it during the current Trading Session (or during the next Pre-Market Trading Session if the order is placed when trading is not occurring). A trade that is not fully executed during Pre-Market or Core Market Sessions will roll over to the next Session. If the trade is still not fully executed by the end of the Post-Market Session at 8:00pm ET, it will be cancelled.


Important Considerations for Extended Hours Trading

Extended Hours Trading may not be suitable or appropriate for all investors and poses certain risks including, but not limited to: lower liquidity, price changes, news announcements, higher volatility, and wider spreads. DriveWealth does not guarantee that there will be a market for trades entered during or designated for Extended Hours Trading; there may be limited trading activity compared to the trading activity during Core Trading Sessions. This may make it more difficult to obtain order executions and may entail other risks such as those listed below:

  • Risk of Lower Liquidity: During Post-Market Trading sessions there may be less trading volume for certain stocks, making it more difficult to execute trades. In addition, there may be a number of orders ahead of yours that will be filled by incoming matching orders before your order can be filled. It is possible that your order will not be executed at all, or only partially executed. Unexecuted orders or portions thereof will be canceled at 8:00pm ET.
  • Risk of Higher Volatility & Wider Spreads. Stocks may experience greater price fluctuation and wider spreads during Extended Hours Trading than during Core Trading Sessions. News stories announced during the Post-Market Session may have greater impact on stock prices, as discussed in greater detail below. Prices may not be calculated or widely disseminated during Extended Hours Trading for certain securities products whose value is derived from an underlying index or calculated at other predetermined intervals.
  • Risk of Changing Prices. The prices of securities traded in Extended Hours Trading may not reflect the prices either at the end of the Core Trading Session or upon the market opening the next trading day. As a result, you may receive an inferior price when engaging in Extended Hours Trading than you would during the Core Trading Session.
  • Not Reg-NMS Eligible. DriveWealth endeavors on a best-efforts basis to obtain the best available price in the market for trades executed during Extended Hours Trading Sessions.
  • Risk of Unlinked Markets. During the Core Trading Session, quotes and last-sales reports are consolidated. Extended Hours Trading quotes and last-sales reports are not consolidated across all Electronic Markets (“EM”). Extended Hours Trading quotes and prices will represent the best prices available at that time only through EMs that may be participating in Extended Hours Trading. Quotes and last-sale prices may vary widely from one EM to another.
  • Risk of News Announcements. Issuers often make news announcements that may affect the price of their securities after the Core Trading Session. Similarly, important financial information is frequently announced outside of the Core Trading Session. These announcements may occur during trading in Extended Hours Trading Sessions, and if combined with lower liquidity and higher volatility, may cause an exaggerated and unsustainable effect on the price of a security.
  • Competition. Many Post-Market-hours traders are professionals who are associated with large institutions and may have access to more information than individual investors.
    Additional information about the risks associated with Extended Hours Trading is available from the SEC at: Post Market Trading: Understanding the Risks.

Extended Hours Trading Session – Terms

All trades designated for Extended Hours Trading will be subject to these Extended Hours Trading terms:

  • Limit Orders Only: Only limit orders are accepted. The maximum individual trade size accepted by DriveWealth is 10,000 shares though this may be further limited by your Introducing Firm.
  • Whole Shares Only: Only whole share orders are accepted.
  • Eligible Securities: Not all securities may be available for Extended Hours Trading. The availability of a particular security may vary based on a number of factors, including the interest in that security during a given Extended Hours Trading Session. DriveWealth does not guarantee that Extended Hours Trading will be available in all securities or Exchanges.
  • Time in Force - Day: If you designate a trade for Extended Hours Trading, then the default time-in-force instruction is for one trading day. This means that if your order is unexecuted (or partially executed) at the end of one of the day’s trading sessions, your order will automatically roll over to the next trading session that same day; any unexecuted trades, or portions thereof, will automatically be cancelled at 8:00pm ET. For example: an order designated for Extended Hours Trading that is unexecuted (or partially executed) at the close of the Pre-Market Session will automatically roll over to the Core Trading Session; in addition, an order designated for Extended Hours Trading that is entered during the Core Trading Session and is unexecuted (or partially executed) at the close of the Core Trading Session will automatically roll over to the Post-Market Session (and if still unexecuted or partially executed at 8:00pm ET will be cancelled).
  • May Not Be Available for All Account Types: Extended Hours Trading may not be supported for all account types.

Updated over 1 year ago