Schwab After Hours Trading: Trade After Hours?LAST UPDATED: April 8, 2023 | By Conrad Golly
Trading after market hours allows you to react to news and get hold of an opportunity you wouldn’t be able to otherwise.
But if you have a Charles Schwab account or want to open one, you may be wondering if they allow you to do that..
Schwab after hours trading: Well, here it is: Charles Schwab does allow you to continue trading after the market closes. More precisely, Schwab has extended trading hours from 4:05 p.m. to 8:00 p.m. ET.
There are many benefits that come with trading after hours. However, there are some restrictions placed for trades during this time as well.
In this article, I will talk about everything that after-hours trading with Schwab entails.
Table of Contents
What Are the Benefits of Trading After Hours on Schwab?
Extended trading hours can allow you to take advantage of news about a stock and act quickly on that news before the market opens.
Let’s look at some of the advantages of being able to trade after hours.
- Convenience – Not all investors have time to take care of trades due to their busy schedules. With after-hours trading, Schwab clients can place trades after their workday ends. They can take advantage of the extended hours and place trades when convenient for them.
- No extra fees or commission – Unlike some brokerages, Schwab does not charge extra to place trades after hours. They stay true to their $0 commission promise even after the market closes. There are also no additional fees for orders placed after hours.
- Trading tools – Charles Schwab offers some tools to help investors placing trades after normal market hours with their trades. Charting tools are available with their desktop platform StreetSmart Edge. The platform also offers research and screening tools that can be used for any trades, including those made after hours.
- Trades can be made with the mobile app – Unlike some brokerages, Schwab allows extended hours trades to be placed via their mobile app as well as via the desktop platform.
- Trades can be made over the phone – Schwab also allows customers to place extended hours trades via phone. To make a trade over the phone during extended hours, simply call 800-435-4000 and ask for an extended hours trading representative.
What Are the Risks of Trading After Hours with Schwab?
Traders should be aware that there are a few risks associated with placing after-hours trades. The risks include:
- Less liquidity – There is generally less liquidity during after-hours trading and finding either a buyer or a seller at the desired price may prove difficult, or sometimes even impossible.
- More volatility – There is usually a bit more volatility associated with trading after hours. This can cause larger price swings during a session.
- Lack of calculation of index values – Traders dealing with index-based products may find that lack of dissemination (or calculation) of index values in the after-hours trading period come as a disadvantage. This is especially the case since some professionals may have access to systems that can quickly and easily calculate index values of individual stock prices.
What Kind of Trades Does Schwab Allow After Hours?
Charles Schwab only allows for limit orders, or an order to buy or sell a stock at a specified price, to be placed after hours.
This means that Schwab clients can only use limit orders to buy and sell during extended trading hours. The platform does, however, allow for shorts on limit orders as well.
Other types of orders are not permitted during extended hours. Therefore, OTC orders, market orders, and international market orders cannot be executed after hours. This is the same with some other brokerages that allow for trading after hours, such as Vanguard.
What Restrictions Does Schwab Place on After Hours Trading?
Aside from only limit orders being allowed during after-hours trading, Schwab also places a limit on the number of shares that can be placed on a single order.
With the Schwab platform, single orders are limited to 25,000 shares during extended trading hours.
This is a fairly low amount compared to some other brokers. For example, Vanguard allows orders of up to 99,999 shares to placed during its extended trading hours.
How to Use the Extended Trading Hours at Schwab
You must use the Extended Hours Trading Screens at www.Schwab.com in order to place an order after hours. You can also call Schwab at 800-435-4000 and ask for an Extended Hours Trading representative to place an after-hours order.
The extended trading hours at Schwab take place through what is called an Electronic Communications Network (ECN). Trades made using an ECN are matched with either a buy or sell order for a specific stock.
Does Schwab Allow Premarket Trading?
Just as Schwab offers after-hours trading, the brokerage also offers premarket sessions.
The premarket session at Schwab takes place between 7:00 a.m. and 9:25 a.m. ET. Trades for the premarket session can be also placed after 8:05 p.m. on the previous trading day. Those trades will be executed at the start of the next day’s premarket session.
This is an option not all brokerages have. For example, although Vanguard offers after-hours trading, it does not have a premarket session where trades can be made.
Schwab After Hours Trading: The Bottom Line
Charles Schwab is one of the many brokerages that offer extended-hours trading. The platform allows limit orders to be placed both after hours and in a premarket session.
This can be a great advantage to investors who want to quickly act on breaking news about a company or stocks. Of course, there are some risks involved and investors should be aware of these before attempting to make any trades during extended hours.
For the most part, however, Schwab is a good platform for trading before or after the market closes. It offers longer extended hours than some brokerages do and features a number of helpful tools that can be used during extended-hours trading.
It seems that the benefits of using Schwab to trade during extended hours outweigh the negatives.