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Why Sleep When You Could Be Trading? New Extended Hours

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January 29, 2018
Overnight Trading

Brexit and the 2016 U.S. election were blunt reminders that the news doesn’t stop when the sun sets—or when the stock market closes. But starting today, qualified TD Ameritrade clients can react immediately to overnight market-moving events by trading select securities with TD Ameritrade’s new overnight extended hours trading feature: 24 hours a day, five days a week (excluding market holidays).

With overnight extended-hours trading on the thinkorswim® trading platform or Mobile Trader App from TD Ameritrade, qualified TD Ameritrade clients will be able to trade a number of securities. They’ll be able to respond when the next big event occurs, even if it’s after most people’s bedtime.

TD Ameritrade is the first U.S. retail brokerage firm to offer this feature. This first phase includes 12 ETFs and expansion plans are in the works. An overnight (EXTO) order is valid from the time placed until the next 8 pm ET session end, Sunday through Friday (excluding holidays). GTC plus EXTO orders will be good for all sessions for 6 months. (For example, if you place an EXTO order at 7 pm ET it will be good for only an hour, but if you place an EXTO order at 8:01 pm ET, it would be good for 23 hours and 59 min. If you add GTC to the order then your order would be good for all sessions for 6 months.) Trading after normal hours comes with unique and additional risks such as lower liquidity and higher price volatility. Your order may be only partially executed or not at all. Learn more. Until now, there was no way to trade ETFs after that, leaving some investors tossing and turning.

“ETF investors never have to miss an opportunity again,” said JJ Kinahan, chief market strategist for TD Ameritrade. “Some traders like the ability to trade overnight via the futures or forex markets, but other investors prefer to stick with the securities they’re used to trading. This can potentially benefit our clients by providing convenience when they are doing their research at night. If an unexpected event happens at night, you can now attempt to manage risk on select ETFs and potentially more to come.”

Why Trade ETFs Overnight?

Maybe you work a proverbial 9-to-5 job and can’t log in to your trading account during those hours, but at night, you follow the markets closely while everyone else is in bed. Maybe you’ve spent late hours researching markets, but couldn’t actually begin trading until after sunrise. That won’t be a problem any longer for those who take advantage of TD Ameritrade’s new offering.

And although many investors already trade futures in the overnight hours—and futures markets fill an important role—most futures trading is in stock indices and commodities. TD Ameritrade now allows you to trade actual ETFs while the crickets chirp outside.

Don’t Miss the Action

Overnight extended hours trading has the potential to be a real game-changer, especially on those occasions when markets make big moves outside normal hours. Both Brexit and the 2016 election upended futures prices long after the day session ended. Both times, futures markets twisted and turned throughout the night, taking bleary-eyed futures investors on a gut-wrenching ride. But most other investors had to watch from the sidelines, unable to trade stocks and options after the markets closed.

By the time the stock market opened the next day, anyone who went into the previous close with open positions in stocks saw them gap up or down in the pre- or post-market sessions—a stressful scenario, to say the least.

Dramatic overnight events like Brexit and the election highlight the need for 24/5 trading, but even the course of normal market life underscores how such a system might be helpful. Potential opportunities that may present themselves overnight include interest rate announcements by the European Central Bank (ECB) and the Bank of Japan (BOJ), as well as economic reports coming out of China, most of which are scheduled ahead of time, just like in the U.S.

TD Ameritrade designed this new program in response to feedback from its customers. Although offerings are limited at the start, TD Ameritrade plans to expand the list to include both stocks and ETFs available to trade 24/5 in the weeks and months to come.

Powerful Platforms, Powerful Tools

Get trading access at many levels, from device-optimized mobile apps to professional-grade thinkorswim® platform and our TD Ameritrade Mobile Trader App.

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