Are you looking to trade outside of regular market hours? Then you might be interested in Fidelity’s extended hour trading. In this article, we’ll explain what extended hour trading is, how it works, and the benefits and risks of using this service. We’ll also go over Fidelity’s specific extended hour trading policies and fees.
What is Extended Hour Trading?
Extended hour trading, also known as after-hours trading, refers to trading stocks outside of the regular market hours of 9:30 a.m. to 4:00 p.m. Eastern Time. During extended hours, you can buy or sell stocks at prices that are different from those during regular market hours.
How Does Extended Hour Trading Work?
Extended hour trading works differently depending on the brokerage you use. With Fidelity, you can trade during extended hours from 7:00 a.m. to 8:00 p.m. Eastern Time. However, there are some limitations to what you can trade during these hours. For example, you can only trade certain types of securities, such as stocks, ETFs, and options. You cannot trade mutual funds or bonds during extended hours.
The Benefits of Extended Hour Trading
One of the main benefits of extended hour trading is that you have more flexibility when it comes to buying and selling stocks. If you have a busy schedule during regular market hours, you can still trade when it’s more convenient for you. Additionally, you may be able to take advantage of news or events that happen outside of regular market hours. For example, if a company releases positive earnings reports after the market closes, you can trade on that news during extended hours.
The Risks of Extended Hour Trading
While extended hour trading can be convenient, there are also risks involved. One of the biggest risks is that there is typically less liquidity during these hours, which means that there may be fewer buyers and sellers in the market. This can result in wider bid-ask spreads, which can make it more expensive to buy or sell stocks. Additionally, there may be more volatility during extended hours, which can lead to bigger price swings.
Fidelity’s Extended Hour Trading Policies
If you’re interested in using Fidelity’s extended hour trading, there are some specific policies you should be aware of. First, as mentioned earlier, you can only trade certain types of securities during extended hours. Additionally, Fidelity charges an additional fee for extended hour trades. The fee is $0.005 per share for stocks and ETFs, with a minimum of $1 and a maximum of 1% of the trade value. For options, the fee is $0.65 per contract.
How to Place an Extended Hour Trade with Fidelity
To place an extended hour trade with Fidelity, you can log into your account and select “Extended Hours Trading” from the Trade dropdown menu. From there, you’ll be able to enter your order details and submit your trade.
Things to Consider Before Using Fidelity’s Extended Hour Trading
Before using Fidelity’s extended hour trading, there are some things you should consider. First, make sure you understand the risks involved with trading during extended hours. Additionally, be aware of the additional fees that Fidelity charges for these trades. Finally, make sure you have a solid trading strategy in place before making any trades.
Extended hour trading can be a useful tool for investors who want more flexibility when it comes to buying and selling stocks. Fidelity’s extended hour trading policies and fees are competitive with other brokerages, but it’s important to understand the risks involved before making any trades. If you’re interested in using Fidelity’s extended hour trading, be sure to do your research and develop a solid trading strategy to help you make informed decisions.