Findoc Blog

After-Hours Trading in India: Benefits, Risks & How It Works

After-Hours Trading in India: Benefits, Risks & How It Works

After hours trading means placing buy or sell orders after the regular stock market hours are over. After this time, you can place an After-Market Order (AMO). These orders do not get executed immediately. Instead, they are sent to the stock exchange when the market opens the next day. After-hours trading is helpful for people who cannot trade during the day or live in different time zones. It gives more time to plan trades based on news or company announcements.

How After Hours Trading Works

After-hours trading offers flexibility for NRIs, working professionals, or anyone unable to trade during market hours. Orders placed after market closure are queued and executed when the market reopens the next day.

  • Trading starts after 3:45 PM once the market closes
  • Orders can be placed using AMO (After Market Order) on your broker’s platform
  • Orders are executed at the market opening the following day
  • Only limit orders are allowed, not market or stop-loss orders

Findoc offers a user-friendly trading platform that allows seamless order placement during after-hours. It also makes it easy to open demat accounts and maintain them at no additional cost.

Also Read: What is a Demat Account?

Broker Access & Order Types (Limit, No Market Order)

Different order types work differently in after-hours trading, and not all are allowed. Here’s a quick look at which order types you can use after market hours:

Order Type Description Allowed After Hours
Market Order Buy/Sell at current market prices. No
Limit Order Buy/Sell at your chosen price Yes
Stop-Loss Sell if the price drops below a certain level No
AMO Place an order after market hours Yes

Findoc allows users to place AMOs easily using their web and mobile trading platforms.

After Hours Trading Hours: India vs U.S. Markets

After-hours trading timings vary depending on the market. While Indian exchanges allow AMOs late into the night, U.S. markets have a fixed extended trading window. Here’s a quick comparison:

Market Trading Time (After Hours)
NSE (India) 3:45 PM to 8:57 AM (Next Day)
BSE (India) 3:45 PM to 8:59 AM (Next Day)
U.S. Markets 4:00 PM to 8:00 PM (Eastern Time).

For futures and options (F&O), AMOs in India can be placed until 9:10 AM the next day.

After-Hours Trading Benefits

Stock market extended trading hours offer flexibility for traders who can’t monitor markets during regular sessions. Here are some key benefits:

  • Let’s trade at your convenience, even after the market closes.
  • Great for people in other time zones, such as NRIs.
  • Gives time to analyse news and trends before placing trades.
  • It can help reduce loss if you react early to upcoming bad news.
  • Useful for working professionals or part-time traders.

These advantages make after-hours trading an excellent option for those seeking more control over their trading schedule.

After Hours Trading Risks

While after-hours trading offers flexibility, it also comes with certain challenges that traders should consider:

  • Fewer people trade during this time, so prices can swing quickly.
  • No stop-loss or market orders allowed.
  • The next morning’s opening price might differ from your expectation.
  • Large investors may have better tools and more information.
  • Stock prices can change due to rumours or false news.

Understanding these risks helps you trade wisely and avoid unexpected losses.

Price Discovery & Impact on Opening Price

After-hours trading plays a role in price discovery, as trades placed during this period can influence how a stock opens the next day. If there’s significant buying or selling after hours, often due to earnings announcements, global market news, or company updates, it may shift investor sentiment. This can lead to price gaps when the market opens, meaning the opening price may be higher or lower than the previous day’s closing price. Understanding this impact helps traders plan better and manage expectations when placing After Market Orders (AMOs).

Who Can Trade After Hours? – Retail vs Institutional

After-hours trading isn’t just for big players; retail traders can also take advantage of it. However, how they trade and the tools they use often differ from institutions.

  • Retail Traders: Can place After Market Orders (AMOs) easily via their broker’s mobile or web platform. It’s simple, but limited mostly to limit orders only.
  • Institutional Traders: Large investors and funds often use advanced systems and analytics, giving them faster execution and better insights during these hours.

You can trade after hours as a regular investor, but institutions generally have an edge with speed and resources.

Strategies for After-Hours Trading

Trading after hours needs a slightly different approach because price movements can be unpredictable.

Here are some strategies to keep in mind:

  • Use limit orders: Control your price. For example, if a stock closed at ₹500, you can set a limit to buy only if it dips to ₹490.
  • Track news and results: Company earnings announced post-market often impact prices.
  • Buy on dips (with caution): If a stock falls temporarily on minor news, it could be an opportunity.
  • Plan around key announcements: Government policy changes or global events can move stocks.
  • Stay calm: Avoid panic trades, verify facts first.

Also Read: Algorithmic Trading Strategies

After Hours Trading vs Regular Trading: Key Differences

After-hours trading differs from regular stock trading in timing, order types, and even risk levels.

Here’s a quick comparison to help you understand the key differences:

Feature Regular Trading After-Hours Trading
Time 9:00 AM to 3:45 PM. 3:45 PM to 8:57/8:59 AM
Order Types Allowed Market, Limit, Stop-Loss. Only Limit Orders.
Liquidity High Low.
Execution Immediate Next Day Market Open
Risk Level Normal Higher Volatility.

Checkout Other Blogs

Frequently Asked Questions

In India, after-hours trading for stocks starts at 3:45 PM and ends at 8:57 AM (NSE) or 8:59 AM (BSE) the next day. These orders are called After-Market Orders (AMOs) and are sent to the exchange when the market opens.

After-hours trading happens after regular market hours, while pre-market trading occurs before markets open. Both allow order placement outside regular sessions but have different timings and limited order types, mainly using limit orders.

During after-hours, only limit orders are allowed. You cannot use market orders or stop-loss orders. In regular hours, all types, market, limit, and stop-loss are available.

Yes, retail investors can easily place AMOs using their broker’s app or website. It’s helpful for people who work during the day or live abroad and want to trade at a convenient time.