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When I place an order during after hours, is the order processed right away?

If I close my position in after hours, is it closed right away?

Is my order queued? If so, is it queued on my broker's platform or at the actual exchange? If it is queued, at what price will it be executed?

So many questions. I would love an explanation of this.

  • Did you consider at any point reading your broker's documentation or providing enough context for us to do some basic investorpedia lookup for you? – TomTom Sep 1 at 22:59
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Assuming that your broker offers after hours trading and you have approval to trade during it then in terms of mechanics, trading in the pre- or after market is no different than during the regular hours. If your price matches that of a counter party, your order is filled immediately and broker notification is the same as it is during regular hours.

There are some disadvantages to AH trading:

  • B/A spreads usually widen
  • Different brokers have different rules (extra fees, types of orders allowed)
  • Liquidity is much lower unless there's special news like an earnings announcement
  • In illiquid markets, you may only get partial fills
  • At times, price is very volatile

Apart from basic vanilla trading, a big advantage of AH trading is that you can hedge other positions. For example, if you own a long option and there's a big move in your favor in the underlying, you can lock in your gain. A classic example of this was election eve in 2016. If you were long puts, you would have been thrilled to see the DJIA futures down about 1,000 points late in the evening. Buying any market proxy (futures, SPY, DIA, etc.) would have locked it in. The next morning it opening only 200 points down and closed up 200 for the day. Poof! Big winner gone.

Do not attempt to trade during after hours unless you are a disciplined trader who can be decisive and react quickly. Otherwise, you'll be the proverbial deer in the headlights and we all know how that ends.

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