How to trade the after-market movers

Shaun H. Ruff

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What you need to know about after-hours trading in India 

After-hours trading means the trading of stocks and derivatives after normal work hours. Share markets worldwide usually operate between 9 am and 4 pm. However, with the availability of the internet, the online share market can be accessed 24 hours. 

Why are after-market hours required?

At the time of closing of trade, some traders may be waiting to get in or out of positions. This may happen for larger stocks with high transaction volumes per day. Stocks with lower trading volumes do not figure in after-hours trading. 

Often, many business and government decisions are declared after closing hours. Companies too declare their earnings in the after-hours at times. The markets tend to be affected by such news. Thus, traders might decide to invest in share market, sell existing holdings, or try to gain a first-mover advantage over their competitors after hearing the news.

After-hours trading gives people the time to trade and invest in the share market at their convenience. If you haven’t traded before, start by opening an account with a reliable broker like Kotak Securities.

How to trade during after-market hours

The trading strategies employed during after-market hours are mostly the same as those used during normal business hours. However, traders might change their strategy depending on market conditions or the current stock trends. 

The basic difference here is that there is no scope for stop loss orders. That is because the price deviations are big, volumes are low, and there are big spreads. Hence, it is prudent to assess your risk-taking ability before venturing into after-hours trading in the online share market.

Pros and cons of after-hours trading



Reduced competition: Traders are few and far between.  So, the field is relatively empty.

Less volume: With few traders in the fray, the total volume of trade is also low.

Extended time: You can do this along with a regular day job.

Difficult for individual traders: Most after-hours trading is done by big institutional trading agencies. These companies have a lot of resources at hand, making it difficult for a lone crusader.

Fresh information: New information about stocks and companies are available at this hour.

Large spread: Owing to lower volume, the difference between the bid and ask prices may be huge. Thus, it is difficult to find a favourable price.

Profitable pricing: The market may be volatile, but a seasoned trader will find suitable prices to cash in on.

Price fluctuations: After-hours trade usually sees erratic stock price movements, which makes it easy to lose money.


After-hours trading in India

The Securities and Exchange Board of India (SEBI) has only recently allowed after-hours trading for equity derivatives. Here are some changes as a result of this.

  • The working hours of the Indian stock market are now at par with international markets.
  • Brokers have to adopt the new schedule and reassess their risk, strategies, and workforce. 
  • The extended time frame allows the Indian investor more opportunities for investment. 
  • Foreign investors can now operate in Indian markets at a convenient time. This will bring in more investment.
  • Longer hours distribute the volume load at the start of the day.
  • Retail traders can participate in many trading sessions across the day.
  • With a surge in online stock market tracking, automated systems are gaining popularity.
  • Many brokerage agencies in India are now promoting after-hours automated trading.
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