Extended Hours Trading Disclosures

 

Last Updated: January 16, 2024

 

What is Extended Hours Trading?

 

The United States market is open between 9:30am ET (“Eastern Time” or local New York City time) and 4:00pm ET (“Core Trading Session”) Monday through Friday (excluding Exchange holidays). Extended Hours Trading refers to the periods of time that you are able to trade after the market closes and before the market officially opens. The rules for trading during Extended Hours Trading sessions may differ from the rules during the Core Trading Session. Extended Hours Trading may not be suitable for all investors.

You should consider the following points before engaging in Extended Hours Trading.


Extended Hours Trading Sessions

DriveWealth’s Extended Hours Trading offering has two components: the Pre-Market Session and Post-Market Session (collectively, the “Extended Hours Trading Sessions”). You must designate an order for Extended Hours Trading for it to be eligible for execution during these two Sessions (according to the terms discussed below), and you do not need to designate an order for either the Pre- or Post-Market Session specifically.

  • Pre-Market Session: The Pre-Market Session is from 4:00am ET to 9:30am ET. Orders designated for the Extended Hours Trading Sessions will begin to queue for the Pre-Market Session starting after 8:00pm ET on the previous trading day and will be eligible for execution (along with orders placed during the Pre-Market Session) during the Pre-Market Session. Any unexecuted or partially filled orders from the Pre-Market Session will automatically roll over into the Core Trading Session and, if still not fully executed, the Post-Market Session.

  • Post-Market Session: The Post-Market Session is from 4:00pm ET to 8:00pm ET. Orders may be entered during this period for execution if designed for the Extended Hours Trading Sessions, and in addition, any unexecuted or partially filled orders from the Core Trading Session will automatically roll over into the Post-Market Session. All unexecuted and partially filled orders will be canceled at 8:00pm ET.

Extended Hours Trading Sessions will not take place on official Exchange holidays and DriveWealth reserves the right to change or modify hours of operation for Extended Hours Trading at any time without prior notice. A DriveWealth Extended Hours Trading Session, or any security traded therein, may be temporarily or permanently suspended without prior notice at any time at DriveWealth’s discretion. The full Pre-Market Session and Post-Market Session hours may not be available for every individual, and you should consult your Introducing Firm for more details on the exact hours Extended Hours Trading is available to you.


How Does it Work?

 

DriveWealth may route orders to nationally recognized Exchanges, lit venues, market makers, and automated trading systems to facilitate Extended Hours Trading. Any orders designated for Extended Hours Trading will be available for execution during that trading day (4:00am ET through 8:00pm ET counting Core and Extended Hours Trading). If Extended Hours is not enabled for an order, that order will be queued for the following Core Trading Sessions (9:30am).

Extended Hours Placed during the Extended Hours and Core Trading Sessions

Once an order is placed and designated for the Extended Hours Trading Sessions, DriveWealth will attempt, on a not-held and best-efforts basis, to execute it during the current Trading Session. An order that is not fully executed during the Pre-Market Session will roll over into the Core Market Session; an order that is not fully executed during the Core Market Session will roll over to the Post-Market Session. If the order is still not fully executed by the end of the Post-Market Session at 8:00pm ET, it will be canceled.

Extended Hours Orders Placed in Neither the Core nor Extended Hours Trading Sessions

Orders designated for the Extended Hours Trading Sessions that were placed in neither the Core nor Extended Hours Trading Sessions will be either rejected, queued for the 4:00am ET start of the Pre-Market Session or executed when the designated price is touched, as described below. Please contact your Introducing Firm for more information.

The following orders will be rejected:

  • If the trade symbol is halted or inactive, any orders (Buy or Sell; Whole Share or Fractional) will be rejected.

  • If the trade symbol is Close-Only or Sell Only, all Buy orders (Whole Share or Fractional) will be rejected.

  • Limit orders of a fractional value are not supported and any such orders (Buy and Sell) will be rejected. 

The following orders will be queued for 4:00am ET:

  • If a whole share order (Buy and Sell) is designated either Limit or Market order, it will be queued for 4:00am ET.

  • Fractional Market orders (both Buy and Sell) will be queued for 4:00am ET.

The following orders will execute when the designated price is touched:

  • If a Whole Share order (Sell) is designated as a Stop order, then a Market order will be created if the price is touched during any Session and will be collared if in Extended Hours Sessions.

  • If a Fractional order (Sell) is designated as a Stop order, then a Market order will be created if the price is touched during any Session and will be collared if in Extended Hours Sessions.

  • If a Buy order (Whole Share or Fractional) is designated as an MIT order, then a Market order will be created if the price is touched during any Session and will be collared if in the Extended Hours Sessions.

 

Extended Hours Trading Sessions – terms.

 

All orders designated for the Extended Hours Trading Sessions will be subject to these Extended Hours Trading terms.

  • Notional and Whole Shares Orders. Both notional and Whole Share orders are accepted for the Extended Hours Trading Sessions, though there may be limitations according to the order type.

  • Types of Orders. For more information on types of orders, please refer to DriveWealth’s Trading Disclosure.

    • Limit Orders. Whole Shares only.

      • Good-til-Canceled Limit Orders. Good-til-Canceled (“GTC”) limit orders placed with an instruction to execute during Core Trading Session and Extended Hours Trading Sessions remain active through such sessions until it is executed in the market, or until canceled. GTC limit orders expire after ninety (90) trading days. 

    • Market Orders. Market Orders designated for the Extended Hours Trading Sessions are subject to Market Order Collaring.

      • Market Order Collaring. Market orders designated for the Extended Hours Trading Sessions are converted to marketable limit orders with a limit price set at a 2.5% difference (above and below) from the national best bid and offer (“NBBO”) price at the time the order was submitted. In other words, orders will not be executed if they are 2.5% above NBBO for a buy order or 2.5% below NBBO for a sell order. If the market price stays outside the 2.5% collar, the order will remain pending and be canceled at the end of the Post-Market Session.

    • Stop Orders. For more information on stop orders, please refer to DriveWealth’s Trading Disclosure.

    • Market-if-Touched (MIT) Orders. For more information on MIT orders, please refer to DriveWealth’s Trading Disclosure.

  • Eligible Securities. Not all securities may be available for Extended Hours Trading. The availability of a particular security may vary based on a number of factors, including the interest in that security during a given Extended Hours Trading Session. DriveWealth does not guarantee that Extended Hours Trading will be available in all securities or Exchanges.

  • Time in Force - Day. If you designate an order for Extended Hours Trading, then the default time-in-force instruction is for one trading day. This means that if your order is unexecuted (or partially executed) at the end of one of the day’s trading sessions, your order will automatically roll over to the next trading session that same day; any unexecuted orders, or portions thereof, will automatically be canceled at 8:00pm ET. For example: an order designated for Extended Hours Trading that is unexecuted (or partially executed) at the close of the Pre-Market Session will automatically roll over to the Core Trading Session; in addition, an order designated for Extended Hours Trading that is entered during the Core Trading Session and is unexecuted (or partially executed) at the close of the Core Trading Session will automatically roll over to the Post-Market Session (and if still unexecuted or partially executed at 8:00pm ET will be canceled).

  • May Not Be Available for All Account Types. Extended Hours Trading may not be supported for all account types.


Important Considerations for Extended Hours Trading

 

Extended Hours Trading may not be suitable or appropriate for all investors and poses certain risks including, but not limited to: lower liquidity, price changes, news announcements, higher volatility, and wider spreads. DriveWealth does not guarantee that there will be a market for orders entered during or designated for Extended Hours Trading; there may be limited trading activity compared to the trading activity during Core Trading Sessions. This may make it more difficult to obtain order executions and may entail other risks such as those listed below:

  • Risk of Lower Liquidity: During Extended Hours Trading sessions there may be less trading volume for certain stocks, making it more difficult to execute trades. In addition, there may be a number of orders ahead of yours that will be filled by incoming matching orders before your order can be filled. It is possible that your order will not be executed at all, or only partially executed. Orders that were not executed or only partially executed during the Post-Market Trading session will be canceled at 8:00pm ET.

  • Risk of Higher Volatility & Wider Spreads. Stocks may experience greater price fluctuation and wider spreads during the Extended Hours Trading Sessions than during Core Trading Sessions. News stories announced during the Post-Market Session may have greater impact on stock prices, as discussed in greater detail below. Prices may not be calculated or widely disseminated during the Extended Hours Trading Sessions for certain securities products whose value is derived from an underlying index or calculated at other predetermined intervals.

  • Risk of Changing Prices. The prices of securities traded in the Extended Hours Trading Sessions may not reflect the prices either at the end of the Core Trading Session or upon the market opening the next trading day. As a result, you may receive an inferior price when engaging in Extended Hours Trading than you would during the Core Trading Session.

  • Not Reg-NMS Eligible. Orders in the Extended Hours Sessions are not-held and DriveWealth endeavors on a best-efforts basis to obtain the best available price in the market for trades executed during Extended Hours Trading Sessions.

  • Risk of Unlinked Markets. During the Core Trading Session, quotes and last-sales reports are consolidated. Extended Hours Trading quotes and last-sales reports are not consolidated across all Electronic Markets (“EM”). Extended Hours Trading quotes and prices will represent the best prices available at that time only through EMs that may be participating in Extended Hours Trading. Quotes and last-sale prices may vary widely from one EM to another.

  • Risk of News Announcements. Issuers often make news announcements that may affect the price of their securities after the Core Trading Session. Similarly, important financial information is frequently announced outside of the Core Trading Session. These announcements may occur during trading in Extended Hours Trading Sessions, and if combined with lower liquidity and higher volatility, may cause an exaggerated and unsustainable effect on the price of a security.

  • Competition. Many Post-Market-hours traders are professionals who are associated with large institutions and may have access to more information than individual investors.

Additional information about the risks associated with Extended Hours Trading is available from the SEC at: Post Market Trading: Understanding the Risks.