After Hours trading with Etrade?

Question

I have an Etrade acct and have been researching some stocks and "practicing" before I start trading. In my research it seems like everyday I see a news story on a stock that makes me want to buy,,and then by the next time it opens its already up 10%+..How do you buy after hours? there are risks,,what are they specifically with after hours? Do you need a special account for this?

any advice would be great!!! can you buy after hours and still put stop oreders etc? any websites that teach this stuff?

Answer 1

The extended market trading works a little differently then normal market hours.  All trades are at a specific limit price i.e., you state the price you are willing to buy/sell and if there is a matching trade on the other side the trade is executed.  There are risks such as lighter volume (thin trading) so you may not be getting the best price.  The ask price tends to be a little higher and the sell price tends to be a little lower.

You can put a stop order on a position but, it will only be executed during the regular trading session.

e-Trade should have information on their website about after-hours trading.  I would check there first for more information.

Stock prices react to news immediately and tends to look forward rather then back.  Generally there is a pull back on a stock price the day after a big rise in price so you can wait a day or two and then buy the stock if you think it is a good investment.  Stocks tend to move right before and after earnings announcements.