Don't Trade After-Hours Without Reading This

Late in 2025, shares in Snap (SNAP) surged as much as 25% following the company's announcement that it had signed a deal to integrate an answer engine powered by artificial intelligence into its social-media app Snapchat. A day later, Duolingo (DUOL) stock plunged 25% after the language-learning platform lowered its guidance for earnings for the quarter ahead.

Both price moves occurred after the traditional stock-exchange hours of 9:30 am to 4 pm Eastern Standard Time. Opportunistic investors who traded after the market closed were able to limit their losses in Duolingo stock or pocket a nice gain in Snap shares.

After-hours trading, once limited to institutional investors and high-net-worth individuals, is now available to regular investors at many brokers, including Charles Schwab, E*Trade, Fidelity and Merrill Edge. It gives investors the opportunity to react immediately to company announcements, which are typically made after the market closes. But it isn't for everyone. There are additional risks to consider, as well as a few particular dos and don'ts.

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Hours of operation

Pre-market; post-market; extended; overnight; after hours — these terms describe the various trading sessions that occur outside of the market's regular hours. But the precise times, among other restrictions, can vary depending on the brokerage firm.

At E*Trade, for instance, trading runs 'round the clock between 8 p.m. Sunday and 8 p.m. Friday. Customers can trade all major-exchange-listed stocks and exchange-traded funds during much of that stretch, but only certain widely held ETFs are eligible for trading in the overnight hours between 8 pm and 7 am Sunday through Thursday. Also, between 4 am and 7 am, E*Trade customers must call an 800 phone number to place trades.

All of the extended trading sessions at Fidelity and Merrill Edge are accessible online, but those hours cover only from 7 am to roughly 9:30 am, and from 4 pm to 8 pm, Monday through Friday (Fidelity's pre-market session ends at 9:28 am). You can trade all listed securities on major exchanges, but not over-the-counter pink-sheet or bulletin-board stocks.

And at Schwab, customers can trade all listed stocks and ETFs in pre- and post-market hours (from 7 am to 9:25 am, and from 4:05 pm to 8 pm), as well as some over-the-counter securities in the pre-market period from 7:30 am to 9:30 am. But clients who use the firm's thinkorswim trading platform can trade more than 1,100 stocks and ETFs around the clock, five days a week.

Certain rules unique to after-hours trading apply. Market orders, for instance, aren't allowed; most brokerage firms require all off-hour trades be placed with a limit order — an instruction from you to buy or sell a security at a specific price or better.

Also, fractional-share trades, even if they are offered during the traditional trading day, are typically not allowed during pre- or post-market sessions. (At Fidelity, you can place fractional-share transactions, but they won't be executed until the next regular trading session.) Options are typically a no-go, too.

Quarterly earnings reporting seasons are prime time for after-hours trading. Good news in any given quarter can drive stocks higher, presenting after-hours investors with a brief opportunity to cash in on a jump in share prices. Sour news, such as a company trimming forecasts for future quarters, can weigh on stock prices; investors can get out before shares drop precipitously.

Wall clock showing 10:10 on a yellow background. Time, hour, minute, second, measuring instrument.

But other scenarios, such as geopolitical events or market downturns, can create opportunity off-hours, too.

"We had some of our highest pre-market trading sessions ever" during the tariff tantrum in early 2025, says Tim Corgan, senior digital manager at Merrill Edge. And overnight news or an early-morning tweet can move prices before the market opens, says Joe Mazzola, head trading and derivatives strategist at Schwab.

Not all customers who trade outside of the regular trading day are looking to cash in on quick bumps. Some are buy-and-hold investors who live in foreign countries, says Mazzola, and some are busy professionals with little time during the workday to make trades.

After-hours trading comes with certain risks that aren't as prevalent when you trade during regular hours. Fewer investors trade off-hours, for instance, so shares have less demand and supply. That can lead to wide bid-ask spreads — the difference between the highest price a buyer is willing to pay for an asset (the bid) and the lowest price a seller is willing to accept (the ask or offer). Prices can shift quickly, too; overall market volatility tends to be higher during after-hours and pre-market trading sessions than during the regular trading day.

Finally, your competition for the best trades during the off-hours are professional investors who are skilled at getting the price they want, which could mean you may not get the best price for your transaction.

After-hours best practices

With those caveats in mind, consider the following best practices to mitigate some of the risks and to improve the outcomes of your after-hours trading:

Watch the bid-ask spread. The reason brokers mandate limit orders after hours is to help lower your risk of getting hurt by unexpectedly wide bid-ask spreads.

"Place the limit price at the midpoint of the spread to protect yourself from the swing in the spread," says Merrill Edge's Corgan. Be aware, however, that limit orders can increase the risk that your order won't be filled. And at most brokerages, after-hours orders are good only for the session.

Stick to smallish order sizes. To improve the odds of your order getting filled at a good price, keep the size of your ticket to 125 to 250 shares a trade, instead of placing one large order for, say, 1,000, says Schwab's Mazzola.

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Time your trades wisely. Outside of regular trading hours, the best times of day to trade are in the two-hour stretch before the market opens and the two hours after it closes. More investors are active then, and liquidity — the supply and demand of shares trading in the market — is greater, Mazzola says.

Be patient. Stock prices can swing dramatically after hours. "Take the time for the market and for you to digest the information before you execute after hours," says Mazzola.

Corgan agrees: "There's an hour window in earnings season when you should pay attention to the trades and the news and the movement of the security and decide if you want to hold or get out of a position," he says.

Don't get greedy. If, like an active trader, you're looking to arbitrage short-term shifts in stock prices based on earnings results, be ready to "take your profit and move on" once you're in the money, advises Corgan. "A profit is a profit."

For these kinds of tactical trades, patience isn't always a virtue. A jump in stock prices based on company news may not stick. By the time pre-market trading begins, shares may have dropped, wiping out your gain, he warns.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

Nellie joined Kiplinger in August 2011 after a seven-year stint in Hong Kong. There, she worked for the Wall Street Journal Asia, where as lifestyle editor, she launched and edited Scene Asia, an online guide to food, wine, entertainment and the arts in Asia. Prior to that, she was an editor at Weekend Journal, the Friday lifestyle section of the Wall Street Journal Asia. Kiplinger isn't Nellie's first foray into personal finance: She has also worked at SmartMoney (rising from fact-checker to senior writer), and she was a senior editor at Money.