It's 4:00 PM, the market bell has rung, and for many, the trading day is over. But for the savvy investor, the game is just getting started. Welcome to the world of after-hours trading on E*TRADE, where opportunities can emerge outside the typical 9:30 AM to 4:00 PM ET window.
Whether you're looking to react to a sudden earnings announcement, capitalize on late-breaking news, or simply extend your trading flexibility, understanding how to navigate E*TRADE's extended hours is crucial. It's a different beast than regular market hours, with its own set of rules, risks, and rewards. But fear not, future after-hours trader! This comprehensive guide will walk you through every step, helping you unlock the potential of trading beyond the bell.
Ready to dive in and see what the market holds after the closing gong? Let's get started!
Understanding After-Hours Trading on E*TRADE
Before we jump into the "how-to," let's establish a clear understanding of what "after-hours" actually means on E*TRADE and the different extended sessions available.
Regular Trading Session: This is the standard market day, typically from 9:30 AM to 4:00 PM ET, Monday through Friday.
Pre-Market Session: This session occurs before the regular market opens. On E*TRADE, it generally runs from 7:00 AM to 9:30 AM ET, Monday through Friday.
After-Market Session (After-Hours): This is the period after the regular market closes. On E*TRADE, it typically runs from 4:00 PM to 8:00 PM ET, Monday through Friday.
Extended Hours Overnight Session: For certain ETFs, E*TRADE also offers an overnight session from 8:00 PM to 7:00 AM ET, Sunday through Thursday. It's important to note that for this session, you'll need to log on to etrade.com to submit orders from 7:00 AM to 4:00 AM ET, and call their support at 800-387-2331 to submit orders from 4:00 AM to 7:00 AM ET (excluding market holidays).
It's vital to remember that these extended hours are facilitated through electronic communication networks (ECNs) and alternative trading systems (ATSs), not the traditional stock exchanges. This distinction is important as it impacts liquidity and pricing.
The Dynamics of Extended Hours Trading: Risks and Rewards
After-hours trading isn't for the faint of heart. While it offers unique opportunities, it also comes with increased risks that you must be aware of.
Potential Rewards:
Quick Reaction to News: Major company announcements, earnings reports, or breaking economic news often occur outside regular market hours. After-hours trading allows you to react immediately to these events, potentially capitalizing on price movements before the next trading day.
Convenience and Flexibility: For those with busy schedules during regular market hours, extended hours offer the flexibility to manage positions or enter new trades at a more convenient time.
Potential for Price Discovery: Sometimes, significant price discovery can happen after hours, setting the tone for the next day's opening. Savvy traders might leverage this to their advantage.
Increased Risks:
Lower Liquidity: This is perhaps the biggest risk. Fewer participants are trading after hours, meaning there are fewer buyers and sellers. This can lead to wider bid-ask spreads (the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept) and difficulty executing trades at your desired price.
Higher Volatility: Due to lower liquidity, prices can fluctuate more dramatically with smaller trade volumes. A small order can have a significant impact on the stock's price.
Wider Spreads: As mentioned, the difference between what someone is willing to buy and sell for can be much larger, making it harder to get a favorable execution price.
Limited Access to Information: While some data is available, real-time information, market charts, and comprehensive technical indicators might be less robust or readily available compared to regular hours, potentially hindering detailed analysis.
Competition from Institutional Investors: After-hours trading is often dominated by large institutional investors with sophisticated tools and resources, which can put individual traders at a disadvantage.
Order Types Limitations: E*TRADE, like most brokers, only accepts limit orders for extended hours trading. Market orders are generally not accepted, and if they are, they might be subject to "collaring" (conversion to limit orders with a price buffer) to protect against extreme price movements. Good-Till-Canceled (GTC) orders are also typically not accepted; orders are usually only valid for the current extended session.
Partial Fills: Due to lower liquidity, your limit order might only be partially filled, leaving you with an unexecuted portion.
It is absolutely crucial to understand and accept these risks before engaging in after-hours trading.
Step 1: Are You Ready? (Enabling Extended Hours Trading on E*TRADE)
Before you can even think about placing an after-hours trade, you need to make sure your ETRADE account is set up for it.*
Sub-heading: Checking Your Eligibility
For most E*TRADE brokerage accounts, extended-hours trading is generally available. However, it's always a good idea to confirm. You might have implicitly agreed to the Extended Hours Trading Agreement when you opened your account.
Sub-heading: How to Enable (or Confirm)
Log in to your E*TRADE Account: Head over to the ETRADE website or open the Power ETRADE app. Use your credentials to log in.
Navigate to Account Settings (or Trading Preferences): Look for sections like "Account Settings," "User Preferences," "Trading Preferences," or similar. The exact location might vary slightly based on the platform interface.
Find Extended Hours Trading Option: Within these settings, you should find an option related to "Extended Hours Trading" or "After-Hours Trading." It might be a checkbox or a toggle that you need to enable.
Review and Accept the Agreement: E*TRADE requires you to acknowledge and accept the Extended Hours Trading Agreement. This document outlines all the specific risks and rules associated with trading outside regular market hours. Read this carefully! It's not just a formality; it contains vital information about what you're getting into.
Confirm Activation: Once you've accepted the agreement, your account should be enabled for extended hours trading. You might receive a confirmation message.
If you're having trouble finding this option, don't hesitate to contact ETRADE's customer support. They can guide you through the process.*
Step 2: The Right Tool for the Job: Choosing Your E*TRADE Platform
E*TRADE offers a few platforms, and while basic after-hours trading can be done on the main website, for a more robust experience, especially with real-time data (where available) and advanced order entry, consider their dedicated trading platforms.
Sub-heading: E*TRADE Website (Standard)
Good for: Casual traders, those just starting with after-hours, or when quick, simple trades are needed.
Process: You'll typically navigate to the "Trade" section, enter your ticker symbol, and then look for an option to specify the "Time in Force" for your order (which we'll discuss in Step 4).
Sub-heading: Power E*TRADE (Web or Desktop)
Recommended for: More active traders who want advanced charting, real-time data streams, and more sophisticated order entry options.
Process: Power E*TRADE is designed for faster execution and more detailed market analysis. The order entry interface will likely be more intuitive for extended hours.
Sub-heading: E*TRADE Mobile App
Convenient for: Trading on the go, quick checks, or reacting to breaking news when you're away from your desktop.
Process: The mobile app offers a streamlined trading experience. You'll generally find the extended hours option within the order entry screen.
Familiarize yourself with your chosen platform before attempting your first after-hours trade. Practice navigating to the order entry screen and identifying the relevant settings.
Step 3: Finding Your Edge: Research and Strategy for After-Hours Trading
After-hours trading isn't a time for guesswork. Due to the amplified risks, thorough research and a well-defined strategy are paramount.
Sub-heading: Reacting to Earnings Reports
The Scenario: A company announces its quarterly earnings after the market closes.
Your Action: If the results significantly beat or miss expectations, the stock price can move sharply. You might want to buy if the news is overwhelmingly positive and you believe the momentum will carry into the next day, or sell if the news is negative.
Considerations: Don't just react to headlines. Dig into the full report, look at forward guidance, and understand why the market is reacting the way it is.
Sub-heading: Leveraging Breaking News
The Scenario: A major industry announcement, a new product launch, or significant regulatory news breaks.
Your Action: Assess the potential impact on specific stocks. Is it a long-term fundamental shift or a short-term speculative event?
Considerations: Be wary of rumors and unverified information. Always cross-reference news sources.
Sub-heading: Technical Analysis (with Caution)
The Scenario: You notice a strong pattern or key support/resistance level being tested after hours.
Your Action: While technical indicators can be less reliable due to low volume, they can still offer insights.
Considerations: Remember that low volume can make technicals behave erratically. What looks like a breakout might just be a single large order. Use caution and combine with fundamental analysis.
Sub-heading: Monitoring Related Markets
The Scenario: Futures markets (like S&P 500 futures) often trade almost 24/7.
Your Action: Movements in these markets can indicate potential sentiment for the broader market the next day.
Considerations: Keep an eye on global markets as well if you're trading international stocks or ETFs.
Always have a clear reason for placing an after-hours trade, and don't chase volatile moves without a well-thought-out plan.
Step 4: Placing Your After-Hours Order: A Step-by-Step Walkthrough
This is where the rubber meets the road. Pay close attention, as a single misclick can lead to unintended consequences.
Sub-heading: Logging In and Selecting Your Security
Access Your E*TRADE Platform: Log in to your chosen ETRADE platform (website, Power ETRADE, or mobile app).
Navigate to the "Trade" Section: Find the "Trade" or "Order Entry" section.
Enter the Symbol: Type in the ticker symbol of the stock or ETF you wish to trade.
Sub-heading: Specifying Order Details
Select Action: Choose "Buy" or "Sell."
Enter Quantity: Input the number of shares you want to trade.
Choose Order Type: Limit Order is Key!
This is crucial. As mentioned, E*TRADE generally only accepts Limit Orders for extended hours trading.
A Limit Order allows you to set the maximum price you're willing to pay (for a buy order) or the minimum price you're willing to accept (for a sell order). Your order will only execute at your specified price or better.
Do NOT use a market order for after-hours trading, even if the option appears. The volatility and wide spreads could lead to a highly unfavorable execution price.
Set Your Limit Price: Carefully enter the specific price at which you want your order to be executed.
Consider the current bid and ask prices carefully. Due to wider spreads, your order might not fill immediately if your limit price is too far off. You might need to adjust it to be closer to the prevailing bid/ask.
Sub-heading: Selecting "Time in Force": The After-Hours Toggle
Locate "Time in Force" or "Session": This is the critical step for activating extended-hours trading. Look for a dropdown menu or an option labeled "Time in Force," "Session," or similar.
Choose the Extended Hours Option: You will typically see options like:
"Day" (for regular market hours only)
"Good Till Canceled" (GTC - generally not available for extended hours)
"Extended Hours" or "EXT" or "Pre-Market/After-Market"
Select the appropriate extended hours option. This essentially tells E*TRADE that your order is eligible for execution during the pre-market or after-market sessions. On some platforms, it might be a clear toggle switch that says "Extended Hours" that you need to turn on.
Sub-heading: Reviewing and Confirming Your Order
Review Order Details: Before submitting, double-check everything:
Ticker symbol
Buy/Sell
Quantity
Limit Price
Time in Force (confirm it's set to Extended Hours!)
Understand Estimated Commission/Fees: E*TRADE generally has $0 commissions for online U.S.-listed stocks and ETFs, but there might be other fees or special charges for broker-assisted trades in extended hours.
Submit Order: Once you are confident in all the details, click "Preview Order" or "Place Order."
Confirmation: You will typically receive an order confirmation. Keep an eye on your order status in the "Order History" or "Open Orders" section.
Remember: If your order is not filled by the end of the after-hours session (usually 8:00 PM ET for the After-Market session, or 7:00 AM ET for the Overnight session), it will typically expire and be canceled. You would need to re-enter it for the next extended session.
Step 5: Monitoring and Managing Your After-Hours Trades
Placing the order is only half the battle. Active monitoring is essential in the volatile after-hours environment.
Sub-heading: Tracking Order Status
E*TRADE's Order History: Regularly check your "Order History" or "Open Orders" section to see if your limit order has been filled, partially filled, or remains open.
Real-time Quotes (If Available): Utilize E*TRADE's real-time quote data to monitor the bid and ask prices for your chosen security. This will help you understand why your order might not be filling or if you need to adjust your limit price.
Sub-heading: Adjusting or Canceling Orders
Modifying Your Order: If the market moves significantly away from your limit price and your order isn't filling, you might consider modifying your order by adjusting the limit price. Be careful not to chase the price indiscriminately.
Canceling Your Order: If you change your mind or the market conditions shift unfavorably, you can cancel your open order at any time before it's executed.
Sub-heading: Staying Informed
News Feeds: Keep a close watch on news feeds and financial publications for any new developments that might impact your position.
Company Announcements: Be aware of any scheduled company announcements that could affect the stock.
The after-hours market can be unpredictable. Be prepared to act quickly, but also exercise patience and discipline.
10 Related FAQs: How to Trade After Hours on E*TRADE
How to know when E*TRADE's after-hours trading sessions are active?
E*TRADE's Pre-Market session runs from 7:00 AM to 9:30 AM ET, the After-Market (After-Hours) session from 4:00 PM to 8:00 PM ET, and an Extended Hours Overnight session for certain ETFs from 8:00 PM to 7:00 AM ET (Sunday-Thursday). These are generally Monday to Friday, excluding market holidays.
How to enable extended hours trading on my E*TRADE account?
Log in to your E*TRADE account, navigate to "Account Settings" or "Trading Preferences," and look for an option to enable "Extended Hours Trading." You will likely need to review and accept the Extended Hours Trading Agreement.
How to place a limit order for after-hours trading on E*TRADE?
When placing an order, select "Limit" as the Order Type and specify your desired price. Crucially, set the "Time in Force" or "Session" option to "Extended Hours" or "EXT" to ensure the order is eligible for after-hours execution.
How to avoid common pitfalls in E*TRADE after-hours trading?
To avoid pitfalls, always use limit orders, understand the risks of lower liquidity and wider spreads, conduct thorough research before trading, and be prepared for higher volatility. Never trade blindly on rumors.
How to check if a specific stock is eligible for after-hours trading on E*TRADE?
Most U.S.-listed stocks and ETFs are eligible for extended hours trading on E*TRADE. However, you can confirm eligibility by attempting to place an order and seeing if the "Extended Hours" time-in-force option is available for that security.
How to monitor my after-hours trade after placing it on E*TRADE?
After placing your order, go to your "Order History" or "Open Orders" section on the E*TRADE platform or app. You can see the status of your order (open, partially filled, filled, canceled) and monitor real-time quotes for the security.
How to cancel an after-hours order on E*TRADE?
You can cancel an open after-hours order from your "Order History" or "Open Orders" section on the E*TRADE platform at any time before it is fully executed.
How to determine a good limit price for an after-hours trade?
Observe the current bid and ask prices and consider the recent trading range of the stock. Due to wider spreads, you might need to place your limit price closer to the current bid (for buying) or ask (for selling) to increase the likelihood of execution, but always within your risk tolerance.
How to know what risks are involved in E*TRADE after-hours trading?
E*TRADE explicitly outlines the risks in its Extended Hours Trading Agreement, which you must accept to enable the feature. Key risks include lower liquidity, wider bid-ask spreads, higher volatility, and competition from institutional investors.
How to ensure best execution for my after-hours trade on E*TRADE?
While E*TRADE strives for best execution, it cannot be guaranteed in extended hours due to lower liquidity. Using a limit order helps ensure you don't trade at an unfavorable price, but it also means your order might not be filled at all if the market doesn't reach your specified price.