After-hours trading

Trading outside of a stock exchange's opening hours.

Most investors will trade the stock market when stock exchanges are open.

In the UK, the London Stock Exchange is open from 08:00 until 16:30 and that’s when most big banks and retail investors will be buying and selling shares.

But some people do trade the market outside of these hours. This is usually referred to as after-hours trading.


How does after-hours trading work?

A stock exchange connects buyers and sellers, enabling investors to purchase or dispose of the stocks or ETFs that they hold.

After-hours trading operates in the same way, it’s just that it’s usually done outside of an exchange. Instead, traders use companies that operate other exchange-like systems.

In the US, these are usually referred to as electronic communication networks (ECNs) or alternative trading systems (ATS). Regulatory requirements mean that, across most of Europe, they are known as multilateral trading facilities (MTFs).

All of these things are effectively names for systems that match buy and sell orders. In simple terms, they act as virtual marketplaces for people that want to buy and sell stocks - much like an exchange does.


Why would you trade after-hours?

The main reason to trade after-hours is if there is something that could affect a company’s stock price that doesn’t take place within regular trading hours.

Let’s say some news came out that an oil company experienced a totally unexpected problem and wouldn’t be able to produce any oil for three months. That would almost certainly drive down its stock price.

But if that happened outside of regular trading hours, investors might go to a company offering after-hours trading and try to sell their stocks in that company as quickly as possible.


Accessing after-hours trading

Accessing after-hours markets is something that not all brokers offer. It will usually cost more than regular trading too.

That’s because accessing the different trading systems requires different technology and the involvement of more third-party companies.

Pricing in the markets themselves will also be affected because there are fewer companies and individuals trading outside of regular trading hours. This makes it harder for market makers to price the stocks they deal in, which in turn widens the spread they offer to traders.

More terms

Capital
Read More
Yield curve
Read More
Synthetic ETFs
Read More
Global Investment Performance Standards (GIPS)
Read More
S&P 500
Read More
Oligopoly
Read More
Over-The-Counter (OTC)
Read More
Investment Return
Read More
Pick the plan that suits you best
Save 17% when you choose an annual subscription.
Basic
£0.00
/Month
Accounts
  • General Investment Account
Benefits
  • A great way to try Freetrade before transferring your ISA or pension
  • Unlimited commission-free trades. Other charges may apply.
  • Trade USD and EUR stocks at the exchange rate + 0.99% FX fee
  • Access to a selection of Freetrade’s 6,200+ global stocks and ETFs
  • 1% AER on up to £1,000 uninvested cash
  • Fractional US shares
  • Access to mobile app and web platform
Standard
£4.99
/Month
£59.88 billed annually
Accounts
  • General Investment Account
  • Stocks and shares ISA
Everything in Basic and:
  • Access to 6,200+ stocks and ETFs
  • A lower FX fee of 0.59% on non-GBP trades
  • 3% AER on up to £2,000 uninvested cash
  • Automated order types, including recurring orders
  • More stats and analysis, including analyst ratings and EPS estimates 
Plus
£9.99
/Month
£119.88 billed annually
Accounts
  • General Investment Account
  • Stocks and shares ISA
  • Personal pension
Everything in Standard and:
  • A lower FX fee of 0.39% on non-GBP trades
  • Priority customer service
  • 5% AER on up to £3,000 uninvested cash
Basic
£0.00
/Month
Accounts
  • General Investment Account
Benefits
  • A great way to try Freetrade before transferring your ISA or pension
  • Unlimited commission-free trades. Other charges may apply.
  • Trade USD and EUR stocks at the exchange rate + 0.99% FX fee
  • Access to a selection of Freetrade’s 6,200+ global stocks and ETFs
  • 1% AER on up to £1,000 uninvested cash
  • Fractional US shares
  • Access to mobile app and web platform
Standard
£5.99
/Month
billed monthly
Accounts
  • General Investment Account
  • Stocks and shares ISA
Everything in Basic and:
  • Access to 6,200+ stocks and ETFs
  • A lower FX fee of 0.59% on non-GBP trades
  • 3% AER on up to £2,000 uninvested cash
  • Automated order types, including recurring orders
  • More stats and analysis, including analyst ratings and EPS estimates 
Plus
£11.99
/Month
billed monthly
Accounts
  • General Investment Account
  • Stocks and shares ISA
  • Personal pension
Everything in Standard and:
  • A lower FX fee of 0.39% on non-GBP trades
  • Priority customer service
  • 5% AER on up to £3,000 uninvested cash

You’re just minutes away from commission-free investing

When you invest, your capital is at risk