Whether you’re a seasoned professional or someone new looking to start investing, you might be wondering when you can actually start buying stocks.
Because buying and selling stocks seems like something that is going on 24/7, many first-time investors are not sure if they can buy stocks on the weekend.
A lot of news about stocks tends to take place on the weekdays and before or after normal business hours.
This may make an individual think that they can only trade stocks during standard business hours.
To ensure you make the most of your trading, whether it be day trading or something more relaxed, it’s worth knowing when the best time to trade is.
Here’s what you need to know about whether you can buy stocks on the weekend or not.
Can You Buy Stocks On The Weekend?
If you want to buy stocks on either the NYSE or NASDAQ stock markets, the answer is no, you cannot buy stocks on the weekend.
That’s because both the NYSE and NASDAQ stock markets operate during normal business hours.
The market opens on Monday at 8 AM and then closes at 4 PM.
It closes for the weekend on Friday at 4 PM.
That said, the NYSE and NASDAQ stock markets do allow after and pre-market trading for certain investors.
These are usually people who have a lot of cash to invest.
There are other methods you can use to buy stocks on the weekend as well.
However, if you’re an amateur trader looking to buy stocks on either the NYSE or NASDAQ, then you’re limited to buying stock during the weekdays within working business hours.
What Are The After And Pre-Market Hours For NYSE And NASDAQ?
If you do manage to find yourself with enough cash to roll with the big-time investors, then you may receive an invitation to buy and sell stocks in the after and pre-market hours for NYSE and NASDAQ.
Sometimes you can even find a broker who can grant you limited access to these markets.
Various Electronic Communication Networks allow you to buy and sell stocks on the weekend.
If you want to buy in the after-hour market for NYSE and NASDAQ, then they run from 4 PM to 8 PM.
If you’re interested in buying stocks before the market officially opens, then the NYSE and NASDAQ have different hours they offer.
The NYSE allows pre-market trading from 7 AM to 9:30 AM.
The NASDAQ allows pre-market trading from 4 AM to 9:30 AM.
Again, actually accessing either of these markets during those times is difficult and limited.
What Are Electronic Communication Networks?
Thanks to the development of computers, many traders have forgone brokers and have taken trading into their hands.
One of the ways that they do that is with an Electronic Communication Network or an ECN.
An ECN is a system that automatically matches buy and sell orders in the market.
It’s particularly useful for investors who want to trade in a market that’s in a different geographical location than they are.
It offers a secure way to conduct trades without actually using a third party.
The SEC requires ECNs to register as broker-dealers since they act as a bridge between brokerages and investors.
ECNs have a purpose in major stock exchanges since they help speed up the process.
However, they’re also popular for after-hours trading.
That’s because traders can trade amongst themselves without the market.
While there’s always some risk to this method, it can also be well worth it.
ECNs are also popular in the trading of cryptocurrency.
Most investors use ECNS for limited order trades.
This helps them safely trade after hours when the state of the market is unclear.
The problem with ECNs is that it can be costly to trade through them.
For the software to earn money, the company charges a fee for every stock that you trade.
While this might not be a lot for someone who holds their shares rather than trades them, it can be expensive for a day trader.
It’s also difficult to use an ECN if you don’t already know how to trade stocks.
The information displayed can be difficult to understand if you’re not a broker yourself.
That said, ECNs are a powerful tool for the right kind of investor looking to buy stock on the weekend or after hours.
How Do You Trade Outside Of Regular Trading Hours?
There are a few methods you can use to trade after hours on the stock market.
- Limited access with after-hours trading
- Private trading
- Middle Eastern Stock Market
- Asian Stock Market
Let’s go over these in more detail.
1. Limited Access After-Hours Trading
One method that investors use to buy stocks on the weekend is through a broker.
Certain brokers are able to grant their clients a limited amount of time trading on the stock market after hours.
The problem is that not all brokers give their clients the best resources with which to do so.
For example, the technology that they’ll offer may be slow.
A slow network connection to the system means you’re not able to act as quickly as others.
You could miss out on an opportunity or not be swift enough to capitalize on one.
Brokers who do use systems with faster exchange speeds tend to limit the number of hours you can trade.
You may be able to find some great deals in an after-hours or pre-hours exchange, but you only ever have a short amount of time to make your moves.
Depending on the time, you may even end up missing an even greater opportunity later.
However, unless you’re a big-time investor with a lot of capital, using a broker is the only way you’ll be able to participate in the NYSE and NASDAQ stock markets outside of normal trading hours.
Electronic Communication Networks are another method that traders can use to buy stocks on the weekend.
This method allows traders to access several different markets across the world.
Even if the NYSE stock market isn’t open, you can still find other stock markets that are open and trading.
You can also find other investors who are willing to trade privately on an ECN.
The major drawback is that this method can cost you a lot of money.
Through commission fees and account fees, you could find yourself paying more to use the system than any money you’re actually making.
This type of method is best for experienced investors or those who understand the stock exchange from a broker’s point of view.
3. Private Trading
Although the stock market closes after business hours, you can sometimes find traders who are still willing to perform trades.
These are usually done through a computer system of some sort.
Trading privately, especially as an amateur, always comes with a great deal of risk.
There may be a reason the private individual is eager to sell their shares.
They may know something that you don’t which could impact the value of your stock shortly after you buy them.
That said, if you want to trade on the weekend, then you can always go into the private sector to find interested parties.
4. Middle Eastern Stock Market
While most investors like to use the NYSE or NASDAQ stock market, they aren’t the only stock markets in the world.
If you want to do some serious buying on the weekends, then you should consider a foreign stock market like a Middle Eastern stock market.
Their weekdays run on the Islamic calendar which means their start of the week is on Friday rather than Monday.
This also means that their business weekdays run from Friday to Wednesday.
You’re able to trade on Saturdays and Sundays with this market.
One Middle Eastern stock market to consider is the Dubai Financial Market or DFM.
To trade in the DFM, you’ll need a broker who can perform foreign trades.
A few brokerage firms are capable of this feat, but one of those most trusted is Interactive Brokers or IB.
By buying on the DFM on the weekends, you not only spread your money around, but you can also get an edge over the competition by trading on the weekend.
5. Asian Stock Market
Another way to get around buying stock on the weekends is by trading in an Asian stock market.
There are a few different markets to consider.
Some of the most popular include:
- Shanghai Stock Exchange
- Beijing Stock Exchange
- Shenzhen Stock Exchange
- Tokyo Stock Exchange
- Hong Kong Stock Exchange
These markets, similar to the Middle Eastern market, run on a different workweek than the NYSE and NASDAQ.
You’re able to buy and sell stocks with any of these stock exchanges on the weekends.
6. Foreign Markets And Time Zones
A bonus way to buy stocks on the weekend is to take advantage of your time zone.
While the NYSE and NASDAQ both close at 4 PM EST, other markets in the world are still trading.
The Asian and Australian markets, for example, are often just opening when those in the United States close.
This gives you the opportunity to keep trading through those markets.
Any country that has a 12-hour difference from EST is a viable option for trading.
That’s because their markets haven’t closed for the weekend yet.
This allows you a few extra hours to trade and buy with them before they close for the weekend, too.
Benefits Of Trading Outside Of Market Hours
If you’re curious about buying stock on the weekends, then you may wonder if there are any advantages to the extra work.
After all, trading on the weekend does come with more risk.
Here are a few benefits you can experience if you decide to start buying and trading stocks outside of market hours.
If you’re an amateur investor, then you probably don’t have the luxury of being on a stock market floor or watching the market throughout the business day.
You may not even work in the finance sector and have a full-time job that you’re occupied with.
The great thing about buying and trading stocks on the weekend is that it increases the time you can spend on your investments.
The weekend is an ideal time for you to spend your time on your hobbies and other pursuits.
You can take a few hours out of the day to give your investments the attention they need without taxing yourself during the standard workday.
With more flexibility in which to actually do your investing, you can finally start to make decisions that can help you increase your gains.
2. Privy To New Information
Another great benefit of trading on the weekends is your ability to act immediately when you receive new information.
Businesses often like to wait until the weekend to deliver bad news.
It ensures that they can potentially come up with some solutions by the time the market opens on Monday.
The good thing about trading on the weekend is that you can act immediately as new information comes to light.
It may be time to sell a stock, or it may be time to prepare to buy strong stocks that are taking a hit at the moment.
Being able to act immediately as companies reveal new information can help you get ahead of the curve of most day traders.
3. Find Rare Deals
Because not everyone buys stocks on the weekend or does trading, you can also sometimes find yourself facing an incredible deal on a trade.
Those who operate on the weekends usually are either big-time investors or amateurs like yourself.
It’s possible that a big-time investor may be looking to make some moves and can cut you in on a deal.
You may miss the opportunity if this occurred during a standard business day on the market.
On the weekend, deals become more exclusive.
Disadvantages Of Trading Outside Of Market Hours
While there are some strong benefits you can enjoy by buying stocks and trading on the weekend, there are some disadvantages, too.
Here are some disadvantages of trading outside of market hours.
1. Execution Risk
One of the biggest disadvantages of weekend trading is the execution risk.
This is primarily a risk for those who use ECNs to do their weekend trading.
The problem with ECNs is that they sometimes lack volume in their market.
When that happens, it takes longer for an order to process.
What might end up happening is that you put in an order for a stock, but because the volume isn’t there, you end up actually buying the stock the next day.
The problem is that the price for the stock might change by that time.
You may believe that you bought stock for one price when, in fact, you paid another.
This is particularly risky on the weekend because the process tends to be slower and there’s even less volume.
2. Extra Charges
Trading on the weekend also tends to come with extra charges.
Whether it’s because you’re working with an ECN or because your broker charges more for working on the weekend, you usually end up taking on more costs.
This can make it disadvantageous for those who are buying stocks passively or not as aggressively as most day traders.
The costs may not be worth the investments.
3. Limited Trading Options
Since you’re unable to trade on the NYSE or NASDAQ, you’re often limited in the type of stock that you can buy.
You’re relying on other markets or private investors who may not be selling stock that you’re interested in.
Even worse, you might end up buying stocks that you’re not passionate about.
The risk may not be worth it in the end.
While it isn’t possible to trade on the weekend with the NYSE or NASDAQ stock markets, it is possible to trade on the weekends through other means.
Both the NYSE and NASDAQ markets offer pre-and after-hour trading, but this is usually exclusive.
As with all investing, there is some risk to buying stock on the weekend.