As an investor, I am always looking for ways to maximize my returns. One way to do this is by taking advantage of after-hours trading.

After-hours trading refers to the period of time after the market closes and during which an investor can place an order to buy or sell stocks or ETFs.

This can be particularly useful for those who want to react to news or events that occur outside of regular trading hours.

In this article, I will provide a step-by-step guide on how to activate after-hours trading with Fidelity.

I will also discuss some important considerations to keep in mind when trading in this market, including the risks and potential benefits.

By the end of this article, you will have a clear understanding of how to activate after-hours trading with Fidelity and be ready to take advantage of this opportunity to potentially increase your returns.

What is After Hours Trading

After-hours trading is a type of trading that allows investors to buy and sell stocks outside of the traditional trading hours.

The traditional trading hours are 9:30 a.m. to 4:00 p.m. Eastern Time (ET), Monday through Friday.

After-hours trading occurs before the market opens and after it closes. This means that investors can place orders to buy or sell stocks from 4:00 p.m. to 8:00 p.m. ET.

Benefits of After Hours Trading

After-hours trading offers several benefits to investors, including:

• Increased flexibility: After-hours trading allows investors to react to news and events that occur outside of regular trading hours.
• Access to international markets: After-hours trading provides investors with access to international markets that may be open when the US markets are closed.
• Potential for increased liquidity: After-hours trading can provide investors with increased liquidity, as there may be fewer traders in the market during these hours.

However, it is important to note that after-hours trading can also be riskier than traditional trading.

The market may be less liquid during these hours, which can lead to wider bid-ask spreads and increased price volatility.

Additionally, after-hours trading may be subject to different rules and regulations than traditional trading.

How to Activate After Hours Trading on Fidelity

As an active investor, you may need to place trades outside of normal market hours.

Fidelity offers extended hours trading to its customers, allowing them to place trades during pre-market and after-hours sessions.

Here are the steps to activate after hours trading on Fidelity:

Step 1: Log in to Your Fidelity Account

The first step to enable extended hours trading on Fidelity is to log in to your account. You can do this by visiting the Fidelity website and entering your username and password. If you haven’t already created an account, you will need to do so before you can access extended hours trading.

Step 2: Agree to the Terms and Conditions

Before you can start trading during extended hours, you must agree to the terms and conditions of Fidelity’s ECN User Agreement. This agreement outlines the risks associated with trading during extended hours, including price volatility and wider price spreads. You will need to read and agree to these terms before you can enable extended hours trading.

Step 3: Enable Extended Hours Trading

Once you have agreed to the terms and conditions, you can enable extended hours trading on Fidelity.

To do this, select “Extended Hours” on the trade ticket under the “Trading Session” option on Fidelity.com, or select “On” on the Fidelity Mobile app during the extended hours session only.

If you are using Fidelity’s ATP, click on “Trade and Orders,” then select “Directed Trade & Extended Hours” to place an extended hours trade.

By following these simple steps, you can activate after hours trading on Fidelity and take advantage of extended trading hours to manage your investments more effectively.

Requirements for After Hours Trading on Fidelity

When it comes to after-hours trading on Fidelity, there are a few requirements that you need to meet before you can start trading. Here are the main requirements:

1. Fidelity Brokerage Account: In order to participate in after-hours trading on Fidelity, you must have a Fidelity brokerage account. If you don’t have one already, you can easily open an account online or by calling Fidelity’s customer service.

2. ECN User Agreement: Once you have a brokerage account, you must agree to the ECN User Agreement before you can place orders during the pre-market or after-hours sessions. This agreement outlines the risks associated with after-hours trading, including price volatility and wider price spreads.

3. Approval from a Representative: Before placing your first trade in the extended-hours session, you must speak to a Fidelity representative to discuss the risks associated with after-hours trading. This is to ensure that you understand the risks and are comfortable with them before you start trading.

4. Eligible Securities: Not all securities are eligible for after-hours trading on Fidelity. Only certain stocks and ETFs are available for trading during extended-hours sessions. You can check the list of eligible securities on Fidelity’s website or by contacting customer service.

5. Trading Session: When placing an order during the extended-hours session, you must select “Extended Hours” on the trade ticket under the “Trading Session” option on Fidelity.com or select “On” on the Fidelity Mobile app during the extended-hours session only.

On the ATP platform, you must first click on “Trade and Orders,” then select “Directed Trade & Extended Hours.” Overall, after-hours trading on Fidelity can be a great way to take advantage of market opportunities outside of regular trading hours.

It’s important to understand the risks and requirements before you start trading. By meeting the requirements and understanding the risks, you can take advantage of after-hours trading on Fidelity and potentially achieve your investment goals.

How to Place An After Hours Trade On Fidelity

Let me first show you how to place an after-hours trade, step by step.

First, try to locate the Lookup Symbol if you don’t know what trading symbol corresponds to the stock you want to trade.

Then, select Trade Extended Hours from the table of contents and select your preferred account that you’ll place the trade order with.

Now, enter the trade information and click Preview Order. By the way, if you want to start over just click on Clear.

At this point, you are ready to finalize your order by clicking Place Order. If you want to cancel and go back, simply select Void. If you place the order, you will receive a number that confirms that your order was received.

Tips for After Hours Trading on Fidelity

As someone who has traded after hours on Fidelity, I have learned a few tips that can help you navigate the market during extended hours.

Here are some things to consider: Firstly, it’s important to remember that after hours trading can be volatile, and prices may fluctuate more than they would during regular market hours.

This means that it’s crucial to set stop-loss orders to limit your losses in case the market moves against you. Another tip is to pay attention to news and events that may affect the market.

After hours trading can be influenced by breaking news, earnings reports, and other events that occur outside of regular market hours. Keeping up with these developments can help you make informed decisions about your trades.

It’s also a good idea to start with small trades when you’re first getting started with after hours trading. This will allow you to get a feel for how the market behaves during extended hours without risking too much capital.

Lastly, be sure to use the tools and resources available on Fidelity’s platform to help you make informed decisions about your trades.

For example, you can use the Active Trader Pro platform to access real-time quotes, charts, and other data that can help you identify trends and make informed decisions.

Remember, after hours trading can be risky, but it can also present opportunities for savvy traders. By following these tips and staying informed about market developments, you can increase your chances of success when trading after hours on Fidelity.

Can Fidelity Trade After Hours?

Yes, you can trade with Fidelity after hours from 4:00 to 8:00 PM. But you can only trade Nasdaq national market stocks.

Other restrictions include that you must only place limit orders and you can’t place All or None or Do Not Reduce orders. As for commissions, Fidelity won’t charge you more for after-hours trading.

What Are the Risks When You Trade After Hours?

One of the greatest risks associated with after-hours trading is the lack of liquidity.

You see, most traders trade during normal stock market hours. So, trades can be executed almost immediately most of the time because there will be a higher chance to find a buyer or a seller.

The real risk here is that the spreads may be wider resulting in costing you more money than if you traded during normal hours.

To drive the point home, let’s say that you want to sell 10 shares at $20 each. During normal hours, you might be able to place a limit order and sell all of the shares for the price that you want ($20). That’s because there are more participants in the market.

However, during extended hours, there are fewer traders and the highest bid might be lower than what you’re asking, say $18. If you want to sell fast, you might have to sell at a cost. If, however, you don’t want to do that, you take the risk of your order not being executed completely or at all.

This is the main risk with after-hours trading. But here are a couple of more to keep in mind:

• Prices are more volatile
  
• There may be stronger competition
  
• Brokers might impose trading limitation (like Fidelity; see this article’s introduction)

But enough about the negative aspect of after-hours trading. Let’s take a look at the bright side…

What Are the Advantages When You Trade After Hours?

As we already briefly mentioned in the intro, after-hours trading allows you more flexibility if you’re an active trader. And that’s the only but still important advantage it offers.

You might also not be a very active trader, but work irregular shifts at your job.

After-hours trading doesn’t fill the whole gap that the normal market hours period leaves, for sure. But it greatly extends the trading activity hours.

But to get back to the more common reason for trading after hours, it basically helps active traders respond to news that happens outside the normal market period.

Many public companies release earnings after that time frame, so after-hours trading is the only way you would be able to react to such events as fast as possible.

If you had to wait till the stock market opens again, you probably wouldn’t be able to place an order at a price you deemed to be attractive.

But that’s all it is when it comes to advantages. This one won’t apply to all. Long-term investors won’t benefit from that in the slightest, for example. If you apply a buy-and-hold strategy, you won’t care if you buy at $40 or $42.

So, make sure that after-hours trading is for you before you get into it.

Verdict: fidelity after hours trading

As I already told you, Fidelity does allow customers to place after-hours orders.

They will encounter some limitations in regards to the variety of the order types that they will have available, though. But at least, Fidelity won’t charge you more for after-hours trading.

Before you go ahead and use their service, however, make sure that you understand the common risks involved. Extended trading hours tend to be more illiquid than normal market hours.

If you’re looking to make large trades, they may be partially executed or at a less attractive price.

If you have time, these articles might help

• Is Fidelity FDIC Insured
• Fidelity Comprehensive Review
• M1 Pies
• Fidelity Trading Hours