How to Buy Stocks After They Close on Fridays
Original post by Lee Nichols of Demand Media
Stock exchanges in the United States close at 4 p.m. EST on Fridays and do not reopen until 9:30 a.m. Monday. Purchasing stocks after the markets close is possible if you have a broker that performs after hours trading and an online brokerage account. After-hours trading is not without its risks and some firms charge a premium for after-hours purchases. Make sure that your online broker allows you to place limits on any purchases you make after the market closes on Friday. By placing a limit on your order, you limit the amount you are willing to pay and the broker's system cancels your order before trading opens on Monday if the stock's price rises too high.
Locate a broker that permits after-hour trading. While after-hours trading is more common than in the past when electronic communications networks were not easily accessible, it is not a service that all brokers provide. According to the Securities and Exchange Commission (SEC), your broker's website will state if it is capable of facilitating after-hours trades.
Find a stock-quote provider that provides real-time quotes for stocks after the market closes on Friday. Since there are fewer investors over the weekend, prices can fluctuate wildly and you must track the prices in real time to select the stocks you want to buy.
Place the purchase order online. If you do not set a price limit on your order and the stock price rises excessively when the market opens, you are committing to purchase the shares at the opening price even if you cannot afford it.
Tips & Warnings
- The execution of the stock purchase does not happen until Monday morning or the next day the market is open.
- Talk with your broker about the risks of after-hours trading before purchasing stock after the market closes on Friday.
- The hours that you can buy stocks after the market closes on Friday depends on your broker.
- U.S. Securities and Exchange Commission: After-hours Trading -- Understanding the Risks
- TradingSim: How Does After-hours Trading Work?
- Fidelity.com: Extended Hours Trading
About the Author
Lee Nichols began writing in 2002 and now contributes to various websites. Nichols holds a Bachelor of Arts in Web and graphic design and a Bachelor of Science in business administration from the University of Mississippi. She is currently working on becoming a Deaconess with the United Methodist Church.