Master Extended Hours Trading on E*TRADE: Your Comprehensive Guide
Have you ever found yourself reacting to a major earnings announcement that drops after market close, or wanting to get a jump on news that breaks before the opening bell? If so, you're not alone! Many investors and traders find themselves in situations where the standard 9:30 AM to 4:00 PM ET trading window simply isn't enough. That's where extended hours trading comes in, offering you the flexibility to trade outside of regular market hours.
E*TRADE, a leading online brokerage, provides robust tools and access for extended hours trading. This guide will walk you through, step-by-step, how to navigate this exciting, yet nuanced, aspect of the market. Let's dive in!
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| How To Place Extended Hours Trade On Etrade |
Understanding Extended Hours Trading on E*TRADE
Before we get to the "how-to," let's clarify what extended hours trading means on E*TRADE. It encompasses two primary sessions:
Pre-Market Session: This occurs before the regular market opens. On E*TRADE, this typically runs from 7:00 a.m. ET until 9:30 a.m. ET, Monday through Friday.
After-Market Session: This takes place after the regular market closes. E*TRADE's after-market session generally runs from 4:00 p.m. ET until 8:00 p.m. ET, Monday through Friday.
Extended Hours Overnight Session: For certain ETFs, E*TRADE also offers an overnight session from 8:00 p.m. ET Sunday to 7:00 a.m. ET Thursday. Orders can be submitted online from 7:00 a.m. to 4:00 a.m. ET, and by phone from 4:00 a.m. to 7:00 a.m. ET.
Important Note: Extended hours trading comes with unique risks due to lower liquidity and higher volatility. We'll cover these in detail later, but it's crucial to be aware from the outset.
Step 1: Are You Ready? Assess Your Account & Understanding!
Before you even think about placing an extended hours trade, ask yourself: "Is my E*TRADE account ready for this, and do I understand the implications?"
1.1: Confirm Your E*TRADE Account is Active and Funded
This might seem obvious, but it's the fundamental first step. You need a live, funded ETRADE brokerage account to place any trades, including extended hours ones. If you don't have one, you'll need to open an account and go through the verification and funding process. ETRADE offers various account types, so ensure you have a brokerage account that allows for stock and ETF trading.
1.2: Enable Extended Hours Trading (If Necessary)
While many E*TRADE accounts are set up for extended hours trading by default, it's always a good idea to confirm. You might need to accept an "Extended Hours Trading Agreement" or similar disclosure within your account settings. This agreement outlines the specific terms and risks associated with trading outside regular market hours.
Navigate to your account settings or profile section within the E*TRADE platform (website or app).
Look for sections related to "Trading Preferences," "Agreements," or "Disclosures."
Review and accept any necessary agreements for extended hours trading.
1.3: Understand the Risks - Crucial for Success!
This cannot be stressed enough. Extended hours trading is not the same as regular market hours trading. The dynamics are different, and the risks are amplified.
Lower Liquidity: Fewer buyers and sellers are participating, which means it can be harder to find a counterparty for your trade. This can lead to your order not being filled, or only partially filled.
Wider Bid-Ask Spreads: Due to lower liquidity, the difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask) can be significantly wider. This means you might buy at a higher price or sell at a lower price than you'd expect during regular hours.
Increased Volatility: News events (like earnings reports or major economic data) are often released outside regular market hours. With fewer participants, these events can cause dramatic and rapid price swings. What seems like a great opportunity can turn into a significant loss very quickly.
Price Disparities: The price you see during extended hours might differ significantly from the opening price during regular market hours.
Limited Order Types: E*TRADE generally only accepts limit orders for extended hours trading. Market orders are typically not allowed. This is a safeguard, as market orders could be executed at highly unfavorable prices due to volatility and wide spreads.
System Limitations: While rare, there can be system limitations or outages that affect extended hours trading.
Take the time to thoroughly read ETRADE's disclosures on extended hours trading.* Knowledge is your best defense against unexpected losses.
Step 2: Research and Identify Opportunities
Tip: Read aloud to improve understanding.
With your account ready and risks understood, now comes the exciting part: finding trade opportunities!
2.1: Stay Ahead of the News
Extended hours trading is often driven by news. Corporate earnings reports, analyst upgrades/downgrades, economic data releases, and geopolitical events frequently occur outside regular market hours.
Utilize E*TRADE's news feeds, market calendars, and research tools.
Set up alerts for companies you're watching, especially for earnings announcements.
Follow reputable financial news sources that cover pre-market and after-hours activity.
2.2: Identify Securities Eligible for Extended Hours Trading
While many listed stocks and ETFs are available, not all securities trade during extended hours. Liquidity can vary greatly.
When searching for a stock on E*TRADE, check if extended hours trading is offered for that specific security.
Focus on highly liquid stocks and popular ETFs, as these tend to have more activity and tighter spreads during extended hours.
2.3: Formulate Your Trading Strategy
Are you reacting to a positive earnings surprise, hoping to capitalize on a pre-market rally? Or are you looking to buy a dip after a negative news event? Having a clear strategy is paramount.
Momentum Trading: Capitalizing on rapid price movements triggered by news.
News-Based Trading: Directly reacting to specific news releases (e.g., earnings).
Risk Management: Determine your entry and exit points, and always consider a stop-loss even though direct stop orders aren't typically supported for extended hours (you'll need to monitor manually or set alerts).
Step 3: Placing Your Extended Hours Trade on E*TRADE
This is where the rubber meets the road. ETRADE's platforms (web, Power ETRADE, and mobile app) make placing these orders relatively straightforward, but paying attention to details is key.
3.1: Navigate to the Trade Ticket
Log in to your E*TRADE account.
Search for the stock or ETF you wish to trade.
Click on the "Trade" button or similar option to open the order entry ticket.
3.2: Configure Your Order Details - The Critical Steps!
This is where you specify the parameters for your extended hours trade.
Sub-Step 3.2.1: Select "Buy" or "Sell"
Choose whether you intend to Buy (go long) or Sell (go short or close an existing position).
Sub-Step 3.2.2: Enter Quantity
QuickTip: Highlight useful points as you read.
Input the number of shares you wish to trade.
Sub-Step 3.2.3: Choose Order Type: Limit Order is a Must!
This is the most critical selection for extended hours trading.
You must select "Limit" as your order type. E*TRADE generally does not accept "Market" orders during extended hours due to the volatility and lack of guaranteed price execution.
A limit order ensures your trade will only execute at your specified price or better.
Sub-Step 3.2.4: Set Your Limit Price
Carefully enter the maximum price you are willing to pay (for a buy order) or the minimum price you are willing to accept (for a sell order).
Refer to the current bid/ask spread and recent price action during the extended session to help determine a reasonable limit price. Remember, wider spreads mean you might need to adjust your price to get filled.
Sub-Step 3.2.5: Specify Time in Force: Extended Hours
This is the absolute key to ensuring your order participates in the extended hours session.
Look for a "Time in Force" or "Session" dropdown menu.
Select an option that explicitly includes extended hours. Common options might be: "Day + Ext," "Good for Day (Extended Hours)," or simply "Extended Hours."
"Day + Ext" / "Good for Day (Extended Hours)": This means your order will first attempt to execute during the pre-market session, then roll over to the regular market session if not filled, and finally attempt to execute during the after-market session. This is often the most convenient choice for comprehensive extended hours coverage.
"Extended Hours": This might limit the order to only the specific extended hours session (pre-market or after-market) you are currently in. Confirm E*TRADE's specific terminology.
Important Consideration: Good-Till-Canceled (GTC) orders are typically not accepted for extended hours trading. Your order will generally be good for the current trading day's extended sessions only.
3.3: Review and Confirm Your Order
Before submitting, meticulously review all the details of your order:
Buy/Sell
Security symbol
Quantity
Limit Price
Time in Force (ensuring it's set for extended hours)
Confirm you understand the risks involved.
Click "Preview Order" or "Place Order."
Step 4: Monitor Your Extended Hours Trade
Once your order is placed, the work isn't over. Active monitoring is crucial.
4.1: Track Order Status
Check your "Orders" tab or "Order Status" section on E*TRADE to see if your order has been filled, partially filled, or remains open.
Be prepared for partial fills, especially with lower liquidity.
4.2: Watch Market Movement
Keep a close eye on the stock's price, bid/ask spread, and any new news developments.
Prices can move rapidly during extended hours. Be ready to adjust your limit price if the market moves significantly away from your initial entry point and you still want the trade to execute.
4.3: Adjust or Cancel Your Order
If your order isn't filling at your desired price, you may need to cancel the existing order and re-enter a new one with an adjusted limit price.
Similarly, if your view on the trade changes due to new information, you can cancel your open order at any time before it's executed.
Step 5: Managing Risks and Best Practices
Successful extended hours trading relies heavily on diligent risk management.
QuickTip: Scroll back if you lose track.
5.1: Start Small
If you're new to extended hours trading, begin with small position sizes to get a feel for the market dynamics without risking substantial capital.
5.2: Use Limit Orders Exclusively
As reiterated, always use limit orders. Never use market orders during extended hours.
5.3: Set Realistic Expectations
Don't expect every extended hours trade to be a home run. Liquidity and volatility can work against you as much as for you.
5.4: Be Patient, But Decisive
Sometimes, a good opportunity requires patience for the right price. However, when news breaks, you need to be decisive in your execution.
5.5: Understand News Impact
Distinguish between a temporary reaction to news and a fundamental shift in a company's outlook.
5.6: Have an Exit Strategy
Know your profit target and your maximum acceptable loss before you place the trade. While direct stop-loss orders aren't active in extended hours, have a plan to manually intervene.
10 Related FAQ Questions
Here are some frequently asked questions about extended hours trading on E*TRADE:
How to trade pre-market on E*TRADE?
To trade pre-market on E*TRADE, log in to your account, open a trade ticket for your desired stock/ETF, select "Limit" order type, enter your limit price, and ensure the "Time in Force" is set to include extended hours (e.g., "Day + Ext"). The pre-market session is generally from 7:00 a.m. to 9:30 a.m. ET.
How to trade after-hours on E*TRADE?
Trading after-hours on E*TRADE follows the same process as pre-market. Access the trade ticket, select "Limit" order, specify your limit price, and choose a "Time in Force" option that includes extended hours. The after-hours session typically runs from 4:00 p.m. to 8:00 p.m. ET.
How to tell if a stock is eligible for extended hours trading on E*TRADE?
Tip: A slow, careful read can save re-reading later.
When you pull up a quote for a stock or ETF on E*TRADE, the platform will generally indicate if it's available for extended hours trading. Highly liquid stocks and popular ETFs are most commonly available.
How to change an order to extended hours on E*TRADE?
If you've already placed a regular hours order and want to convert it to an extended hours order, you will typically need to cancel the original order and then re-enter it, making sure to select a "Time in Force" option that includes extended hours (e.g., "Day + Ext").
How to cancel an extended hours trade on E*TRADE?
To cancel an open extended hours trade on E*TRADE, navigate to your "Orders" or "Order Status" section. Locate the specific open order you wish to cancel and select the "Cancel" option. This must be done before the order is executed.
How to view extended hours quotes on E*TRADE?
ETRADE's trading platforms (web, Power ETRADE, and mobile app) generally display real-time quotes for eligible securities during extended hours sessions. You'll see the current bid, ask, and last trade price reflecting the extended hours activity.
How to understand the risks of extended hours trading on E*TRADE?
The key risks include lower liquidity, wider bid-ask spreads, increased volatility, and the possibility of your order not being filled or only partially filled. E*TRADE provides detailed disclosures on these risks, which should be thoroughly reviewed.
How to choose the right order type for extended hours on E*TRADE?
Always choose a limit order for extended hours trading. Market orders are generally not accepted and could lead to unfavorable execution prices due to the volatile and less liquid nature of these sessions.
How to find news relevant to extended hours trading on E*TRADE?
Utilize E*TRADE's built-in news feeds, earnings calendars, and research tools. Many financial news websites and services also cover pre-market and after-hours news, which can significantly impact stock prices.
How to manage my extended hours positions after the regular market opens on E*TRADE?
If your extended hours order executes, it becomes a regular position in your account. You can then manage it like any other trade during regular market hours, using standard order types (market, limit, stop) for closing or adjusting your position.
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