With the rise and evolution of electronic trading, investors over the world have access to financial markets in the palm of their hands. They can connect to their brokerage accounts through their laptop or phone as long as they have a stable internet connection. This allows them to trade whenever the stock market is open. However, can investors trade over the weekend?
We will take a look at when the stock market is open and closed and why it is typically not open on weekends, along with certain types of instruments that you can trade over the weekend.
Summary
- The regular stock market is open from 9:30 AM EST – 4:00 PM EST
- One of the main reasons the stock market is closed during the weekend is because most banks are closed for business during the weekend
- There are different financial instruments like crypto that trade over the weekend
- Trading during the weekend has additional risks that investors should know prior to participating
Current US Stock Market Hours
The US stock market is closed over the weekend. Regular trading hours in the stock market are from 9:30 am EST – 4:00 PM EST. However, traders can submit orders after the stock market has closed, during extended trading hours. Extended trading hours are only available Monday through Friday after the stock market has closed.
It’s worth noting that not every retail broker offers extended hours of trading to their clients. Some brokers only offer it to clients who deposit a certain amount of capital or request to have extended hours trading enabled.
Why Are Stock Markets Closed on the Weekend?
The stock market is closed during the weekend, and also on all US public holidays. It’s entirely possible to have the stock market open for weekend trading. The majority of stock trading is facilitated by private ECN’s and liquidity providers who have the necessary technology in place to allow weekend trading.
Let’s take a look at some of the main reasons why the stock market is closed during the weekend.
1.) Banks Are Closed Over the Weekend – One of the main reasons the stock market is closed during the weekend is because most banks are closed over the weekend. Banks are needed for funds to settle between counterparties and to manage payment obligations between clearinghouses.
2.) Rooted in Tradition – Another reason the stock market is closed during the weekend is that’s how it has been traditionally handled throughout history. Before 1928, the stock market was opened on Saturdays but closed on Sundays due to religious worship. After the Stock Market Crash of 1929, the stock market started closing on Saturdays to give exchanges more time to catch up on paperwork.
3.) Give the Markets Time to Digest Information – The stock market can prematurely overreact to news announcements that can send volatility soaring within a short period. By having the stock market close during the weekend, investors, retail traders, and money managers can take additional time to digest information. This can help them make more informed investment decisions instead of falling prey to irrational exuberance.
4.) Allows Stock Options to Settle – Another important reason the stock market closes is for stock options settlement and assignment. Options are a derivative of the underlying stock and expire on Fridays.
Are there Financial Products That Trade Over the Weekend?
Certain financial products trade over the weekend and also when the stock market is closed during the week. Some of the instruments include:
- Crypto – trades 24/7/365
- Forex – trades from Sunday 5:00 pm EST – Friday 5:00 pm EST
- Synthetic Indices – trade 24/7/365
- Binary Options – trade 24/7/365
These are the main financial products that you can trade over the weekend, but they can be extremely volatile and risky to trade.
Why Do Stocks Stop Trading During the Week?
By restricting stock trading for a finite period of time each day, stock exchanges allow the market to function at the highest possible efficiency. The idea of having the stock market open all day non-stop sounds like it would create more opportunity for traders and investors. However, it can actually create additional problems such as:
- Price manipulation
- Wider spreads
- Increased Volatility
- Less oversight
- Worse execution
- Panic selling during news announcements
In the long term, having the stock market open all day can create a less efficient trading environment for investors and traders.
Can You Buy Stock Over the Weekend?
You technically can’t trade stocks over the weekend as a retail investor, but you can submit orders after the market closes. These orders will be filled once the market re-opens for trading.
It’s worth noting that in certain special situations there may be high net worth individuals who may be able to trade stocks over the weekend. This is very rare and is typically handled through dark pools at off-market rates. This type of trading is not publicly available for retail investors and is mainly reserved for institutions in unique circumstances. This is typically considered trading through dark pools and ECN’s that will facilitate it on indicative pricing.
Are There Brokers That Allow Weekend Trading?
Some retail brokers permit weekend trading, but none that are are publicly available for stock trading. Brokers that do allow weekend trading are brokers who offer crypto, forex, binary options, and synthetic indices. Trading in the stock market over the weekend is typically not recommended for beginner investors.
These types brokers tend to be unregulated and should be treated with extreme caution. Generally, we advise investors to avoid participating in most weekend or extended hours trading due to the inherent risk involved.
FAQ’s
Does Webull Allow Weekend Trading?
Webull allows extended hours trading with limit orders. Their pre-market hours are 4:00 AM EST – 9:30 AM EST and their after-hours trading is from 4:00 PM EST – 8:00 PM EST. Webull allows you to trade crypto 24/7.
Does Robinhood Allow Weekend Trading?
Like Webull, Robinhood also offers the standard extended hours trading schedule. Robinhood also allows you to trade crypto 24/7.
