As the sun sets on Friday evening and the hustle and bustle of the stock market calms for the weekend, most investors take some time to reset and prepare for the week ahead.
But for others, there are no days off. After all, Saturday and Sunday are when some of the best opportunities present themselves. From earnings announcements to foreign market activity, you want to know…can you trade stocks on the weekend? Specifically, can you buy stocks on the weekend and can you sell stocks on the weekend?
Perhaps you’ve found yourself contemplating these questions as you strategize your investment plan over a cup of Saturday morning coffee. The answers, however, aren’t as straightforward as you might think. As we delve into this intriguing aspect of stock trading, we will unravel the complexities surrounding weekend trading and help you navigate these uncharted waters.
So, to set the stage for the rest of this conversation on weekend trading, let’s take a look at the days and hours that make up the normal trading week.
The Normal Trading Week: Monday to Friday, 9:30 a.m. to 4:00 p.m
Let’s start with the basics of how the stock market works. Generally, the stock market operates during standard business hours from Monday to Friday, opening at 9:30 a.m. and closing at 4:00 p.m Eastern Time (ET).
This time frame, known as “regular trading hours”, is when most stock trading occurs. During these hours, traders and investors alike engage in buying and selling shares of companies listed on exchanges like the New York Stock Exchange (NYSE) and the NASDAQ.
Additionally, there’s a brief period before and after regular trading hours known as pre-market and after-market trading sessions, typically from 4:00 a.m to 9:30 a.m. and 4:00 p.m. to 8:00 p.m ET, respectively.
These sessions provide extra trading windows but can often come with increased volatility due to lower liquidity. That being said, can you trade stocks on the weekend outside of these normal hours?
Can You Trade Stocks on the Weekend?
The world of stock trading is mostly confined to the standard business week. If you’re an investor or trader using major U.S. exchanges like the NYSE and NASDAQ, you’ll typically operate within the standard trading hours, Monday to Friday, 9:30 a.m. to 4:00 p.m. ET.
As such, direct trading on these platforms during weekends is not feasible. However, there are some alternatives and exceptions. So, can you buy stocks on the weekend?
Can You Buy Stocks on the Weekend?
While the stock exchanges might be closed over the weekend, electronic trading platforms have brought a certain level of flexibility to the process.
These platforms allow investors to place orders to buy stocks outside of standard trading hours. If you place a buy order over the weekend, the transaction will not be executed immediately but will instead be queued up for execution once the market opens on Monday.
Do note that price fluctuations can occur between the time you place the order and when the transaction is completed. This might lead to “price gaps” where the executed price may be different from the price when you placed the order. Now, let’s look at the other side of the coin – can you sell stocks on the weekend, too?
Can You Sell Stocks on the Weekend?
The situation for selling stocks mirrors that of buying them. While you can’t directly sell your stocks on the NYSE or NASDAQ over the weekend, you can submit your sell orders. Like buy orders, these sell orders will not be fulfilled immediately. Instead, they will be in a queue waiting for the markets to reopen on the following Monday. Again, the risk of price gaps exists, meaning the selling price might vary from what you expected when placing the order.
It’s worth remembering that some minor exchanges and select futures markets operate over the weekend. However, for the majority of retail investors trading typical stocks and ETFs, the activities are confined to the standard business week. Trading over the weekend is possible in a limited sense, but it comes with its own set of complexities and potential risks.
So, can you trade stocks on the weekend? Yes, but not in the traditional sense. And further to that point, there are some things you need to be aware of as it pertains to risk when you buy and/or sell stocks on the weekend. That being said, let’s pose a better question: should you buy or sell stocks on the weekend?
Should You Buy and/or Sell Stocks on the Weekend, Though?
Just because you can, doesn’t mean you should. Deciding to buy or sell stocks on the weekend is a strategy that can be influenced by a variety of factors. It’s a decision that must be made considering both the potential advantages and the possible pitfalls. That being said, let’s assess some of the pros and cons of weekend trading.
Why Would You Want to Buy and Sell Stocks on the Weekend?
Really, the appeal to buy and sell stocks on the weekend can be summed up in a single word: opportunity. Just because the stock market is closed, doesn’t mean opportunities take the weekend off!
So, an investor might choose to engage in weekend trading to take advantage of events or news that occur outside of standard trading hours. Companies often release earnings reports or other significant news during weekends, which can result in dramatic price changes once markets open the following week. By placing your orders during the weekend, you might be able to capitalize on these expected price movements.
In addition to this, developments in foreign markets, which can be open while the U.S. markets are closed, might affect the prices of stocks and ETFs that have exposure to these markets. Trading on the weekend gives you an opportunity to respond to these events before the U.S. market reacts to the news on Monday.
What is the Downside to Trading Stocks on the Weekend?
All that being said, it’s worth noting that there is a downside to trading stocks on the weekend that you should know about. While trading stocks on the weekend might sound like a strategic move, it comes with its own set of risks.
One of the major downsides is the potential for higher volatility. Since trading volumes are generally lower outside of regular trading hours, price swings can be more dramatic, which can result in the execution of your orders at prices significantly different from when you placed them. This phenomenon is commonly referred to as “gapping.”
Additionally, because of the lack of liquidity, the bid-ask spreads can be wider during weekends. This could make buying or selling certain stocks more costly. Moreover, news and events that occur over the weekend can lead to unexpected market reactions on Monday, adding to the risk.
Therefore, while there can be opportunities in weekend trading, it’s essential to be aware of the associated risks. Proper due diligence and risk management strategies are crucial if you choose to buy or sell stocks over the weekend.
What Stocks Can You Trade on the Weekend?
So, you know that you can trade stocks on the weekend – at least, to a certain extent. You may not have your orders execute immediately, but you can get them placed. Or, you can trade on an exchange that is open on weekends. All that being said, what stocks can you trade on the weekend? It all depends on where you’re trading.
Some online brokers allow you to trade popular, high-volume stocks on the weekend. On the other hand, you can trade certain Exchange Traded Funds (ETFs) on international exchanges that operate on weekends. Examples of these are the Tel Aviv Stock Exchange in Israel or the Tadawul Stock Exchange in Saudi Arabia, both of which operate on Sundays.
Furthermore, certain futures contracts, such as index futures, can be traded virtually 24/7, including weekends. This can be a way to get exposure to stock market movements during the weekend if you can’t trade the stocks you want.
Tips for Buying and Selling Stocks on the Weekend
Engaging in weekend trading requires a unique set of strategies and practices. Here are some tips:
- Stay Informed: Staying updated with global market trends and news is vital. Foreign market activity and other significant events happening over the weekend can greatly influence the U.S. market’s opening on Monday.
- Prepare for Volatility: As mentioned before, weekend trading can see higher price volatility. Ensure you have strategies in place to manage the risk, such as setting stop-loss orders to cut losses if need be.
- Monitor Liquidity: Be aware that trading volume during the weekend can be lower, potentially impacting the speed at which you can buy or sell stocks.
- Use Limit Orders: To protect against wide bid-ask spreads and unexpected price jumps, consider using limit orders rather than market orders when trading on the weekend.
- Leverage VectorVest’s Tools: Use VectorVest’s advanced tools to identify strong-performing stocks, assess market conditions, and inform your weekend trading decisions. Our platform can assist in conducting thorough stock analysis, managing risks, and executing trades effectively – with less work and less stress along the way. You can use our full-fledged stock analysis software from your desktop or our mobile stock advisory to take your weekend trading strategy on the go.
Parting Thoughts on Trading Stocks on the Weekend
So, can you buy stocks on the weekend? And, can you sell stocks on the weekend? Yes – you can trade stocks on the weekend, but not in the way you may be used to.
While the possibility of trading stocks on the weekend presents unique opportunities, it’s not a strategy that suits all investors. The higher volatility, lower liquidity, and potential risks associated with off-hours trading may discourage some investors. However, if you do decide to venture into weekend trading, it’s crucial to be well-prepared, informed, and strategic in your approach.
You can learn more about this in our full breakdown of after hours trading. We also have blog posts covering the best time of day to buy stocks, best day to sell stocks, how to buy the dip, how to select stocks for swing trading, the best stock for option trading, and more.
Moreover, leveraging tools like VectorVest can make a significant difference. Our platform’s comprehensive suite of tools can aid you in monitoring market trends, picking the right stocks, and making informed decisions, thereby helping you navigate the complex world of weekend stock trading with confidence.
Remember, the goal is not just to trade but to trade wisely and profitably. And with VectorVest, you can win more trades with less work. See the system in action with a free stock analysis today and see firsthand what makes it the best stock analysis app for beginners.