After-Hours Trading: Meaning, How it Works & Benefits | My Espresso

After-Hours Trading Explained

Previously, things were different in the stock market in India. The trading operations were held only from Monday to Friday, and right when the clock turned 4, everyone used to stop trading. Over time, India took inspiration from the foreign exchange’s more extended hours of trading.

Plus, the surge in competition led to the need for a change in trading hours. So, today, if you wonder, ‘can we buy shares after the market closes in India,’ the answer is yes.

Published on 17 January 2023

With the introduction of after-hours trading by the New York Stock Exchange (NYSE), one can buy or sell securities at their convenient time. This article will teach you all about after-hours trading, how it works, its benefits, and more. So, let’s read till the end.

After Hours Trading: What Does It Mean? 

If someone asks, ‘can we buy shares after the market closes in India,’ tell them it is possible due to after-hours trading. But before they ask you what after-hour trading is, you should be well aware of it first. So, here it goes:

The term “after-hours trading” describes the time frame when such a trader can purchase and sell stocks. Standard trade hours for the NYSE and NASDAQ, the two largest exchanges in the US, begin at 9:30 a.m. and end at 4:00 p.m.

The stock market exchanges let trade resume during the after-hours period from 4:00 to 6:00 p.m. when regular trading has ended.

Often these classes go till 8:00 p.m. ECNs (Electronic Communication Networks) are used for trading, allowing sellers and buyers of securities to transact without physically being there on the stock exchange floor. So, if you still wonder, ‘can you buy stocks after hours,’ you’ve got your answer - yes!

After-Hours Trading: How Does It Work?

Trade that occurs after business hours differs slightly from trade that occurs on the exchanges during the day. Your request is sent to an ECN (electronic communication network) rather than the exchange. In contrast to normal trade on the NYSE or NASDAQ, it has some restrictions and extra dangers.

Most importantly, buyers and sellers can only trade shares using a stop loss. Trade requests are matched by the ECN using limit pricing. Orders placed after hours are also only valid for that period. If you really do want to buy the stock once trading resumes the following day, you will need to place another order.

What if you say yes to someone asking, ‘can we buy shares after the market closes in India,’ but they ask ‘how’ on the counter?

Tell them you need to sign into your trading account and choose the share you wish to purchase for an after-hours deal. After that, you execute a stop loss much as you would throughout a regular trading period.

After-hours trading may incur additional fees from the broker, and many don’t even ask for it, so make sure to inquire. Your broker then forwards your order to the ECN that it utilizes for after-hours trading. Your order will be compared by the ECN to a similar purchase or sell request on the system.

In other words, if you place an order to buy 200 shares of Abc at $50 apiece, the ECN will search for an order to sell a minimum of 200 shares at $50. Settlement timeframes are just like regular trading sessions if they can perform your transaction.

After-Hours Trading: A Few Benefits To Know!

Now that you know the answer to ‘can we buy shares after the market closes in India,’ you’ll be glad to discover that there are specific advantages if you’re looking to trade after business hours.

  • Convenience and Accessibility – Dealing after hours allows you to investigate what the share market accomplished that day and trade accordingly. Hectic schedules may make it challenging to sell or buy during normal trading sessions.
  • React to Events – You might have noticed that some businesses occasionally make quarterly profit announcements or major news announcements that impact the business after the market shuts down. By engaging in after-hours trading, you can respond to that news right away, avoiding the need to hold off until the following trading day and perhaps lose out on gains.

Ending Note

You won’t have to search online or ask others: ‘can we buy shares after the market closes in India.’ The answer is always yes, thanks to the after-hours trading concept introduced by the NYSE.

Even while trading during off-hours carries some risk, trading, in general, is a risky endeavor after all. You can profit from after-hours trading at your own pace when done correctly and prudently. Utilize it to understand industry trends and make thoughtful decisions.

Chandresh Khona
Team Espresso

We care that you succeed

Bringing readers the latest happenings from the world of Trading and Investments specifically and Finance in general.