Robinhood Extended Hours: How to Trade After Hours?

Having the ability to shift your portfolio outside of normal market hours can make a big difference when major events are happening. Access to trading features, as well as information for strategizing, can help investors feel in control at all times. If you are using Robinhood, how do you make use of after-hours trading on the platform?

Traders can make market orders during the extended hours offered by Robinhood when the market is closed. Robinhood automatically converts these to limit orders and executes them as normal. Any orders placed outside of the extended hours will be queued until the following trading session.

These extra hours allow traders to take stock of the day’s events, any announcements made by companies during the day, and foreign market influences. The convenience of extended trading hours is especially handy considering that Robinhood offers a mobile trading app. Traders can make adjustments to their portfolios quickly and conveniently at practically any time, such as on the commute home from the office.

While the basic buying and selling options are available after hours, not all of Robinhood’s services are available. Some features are unavailable after the markets close and on weekends. These are generally more sophisticated trading options and many investors may not use them in the first place.

There are also some differences in market conditions during after-hours trading. These mostly have to do volatility, liquidity, and price spread, which can make after-hours trading potentially more risky. However, with increased risk often comes the chance for increased reward.

Robinhood offers information on stocks, funds, and other securities at all times. Traders always have access to information regarding their portfolios and potential purchases, even when the markets are closed. Traders can then use this information to place after-hours orders or to queue orders for the next opening bell.

What Are Robinhood’s Extended Trading Hours?

Traders can access their Robinhood accounts twenty-four hours a day, however, trades are only allowed during certain times. After-hours trading on Robinhood is available thirty minutes prior to the market’s opening, from 9 to 9:30 am EST, and for two hours after the markets close from 4 to 6 pm EST. These extended hours add an additional two and a half hours of trading time to each day. What can traders do during these extended hours?

Can You Trade During Extended Hours on Robinhood?

During extended hours, traders can place market orders as they normally would, the only difference is that Robinhood will execute the orders as limits automatically. This means that traders can buy and sell shares, but not necessarily specify the exact amount of shares or the exact price they will pay.

Instead, the limit function allows the buyer to specify the maximum amount they are willing to pay to purchase a stock, or the minimum they are willing to accept for a sale. 

Traders can also place orders outside of the extended trading hours. These orders will be saved and executed when the market opens at 9:30 am EST on the next day of trading. This is a convenient way to get a jump on the next day of trading without having to be sitting in front of the app exactly when the market opens. This type of trading may be well suited for long term investors who are not particularly concerned with small fluctuations in value.

There are a few limitations to the trades that can be made during extended hours. Stop orders, stop limit, stop loss, and trailing stop orders will not execute during extended hours. Instead, they will execute when the market opens for the next trading session. These features cannot be utilized after the extended hour’s session ends either. 

There are also some stocks, funds, and other securities that do not support after-hours trading. There can be a number of reasons for this decision, which is left to the company’s discretion. In these instances, trades made during extended hours will wait until the following trading session to execute.

Any good-for-day orders which are made during extended hours will cancel at the end of the after-hours session and good-for-day orders made during regular trading will need to be renewed during the after-hours session. Orders marked good-til-canceled will not be affected when the after-hours session ends.

Robinhood also supports the trading of several cryptocurrencies such as Bitcoin and Etherium. These markets are available twenty-four hours a day and traders can make market or limit orders at any time with no restrictions based on market opening hours. Robinhood typically offers instant deposits for cryptocurrency purchases, except in times of extreme market conditions.

What Happens If You Buy After Hours on Robinhood?

Purchasing a stock after hours on Robinhood is essentially the same as making a regular session purchase, with a couple of key differences. As we’ve noted, all after-hours orders will automatically be converted to limits. 

These limit orders are automatically executed with a 5% collar. This is done to better the likelihood of the trade executing during times of increased volatility and decreased liquidity. Without the cushion from this extra 5%, market volatility might move some stocks out of the limit range of buyers’ orders.

After the markets close, there is typically less liquidity available. This means that it may be more difficult to execute orders in full. The 5% collar that Robinhood automatically adds to each limit order during extended hours is put in place to help ease any problems due to reduced liquidity.

Markets are often more volatile during extending hours as well. This means that prices of stocks may move more dramatically than they normally do during market hours. Volatility can mean added risk for traders, but it can also mean an opportunity for big gains in the short term.

This increased volatility, combined with reduced liquidity can affect the spread, which is the difference between what price you are able to purchase a stock, and at what price you are able to sell it. When markets have fewer buyers, it is meaning less liquidity, the price required to sell a share may be significantly lower than the price to buy it. In other words, trading during extended hours may involve more risk than regular session trading.

How to Trade After Hours on Robinhood

For the most part, after-hours trading works nearly identically to trading while the market is open. Users will log in to their app, find a stock that they wish to buy or sell, and either choose to execute it as a market order or set their limit options. As previously mentioned, any market orders made during extended hours are automatically converted to limit orders with a 5% collar.  They will then review and confirm the order.

Unlike some trading platforms such as E*Trade, which charges fees for after-hours trades, Robinhood allows its users to utilize this service for free. There are no additional fees or commissions on trades made after hours. Trades on Robinhood are instant and users will receive a confirmation that their order has been executed both in the app and via email.

Trading cryptocurrencies with Robinhood works exactly the same, no matter the time of day. Traders can place market or limit orders around the clock as normal. The only exception to this is when Robinhood is doing its daily site maintenance, when functionality may be reduced.

Is Robinhood Open on the Weekends?

Traders cannot make trades on Robinhood over the weekend or on holidays. Any orders which are placed during these times will be queued until the opening of the next trading session. This includes all types of market and limit orders. The only exception is the cryptocurrency market, which is always available on Robinhood, including weekends.

Traders do have access to view their portfolios through the Robinhood mobile app or web platform over the weekend. These services are always available and traders can use them to track how their portfolios have been doing as well as plan future investments. Further, investors can use the browse feature to research dividend yields, market caps, and other statistics for stocks that they might be considering purchasing at any time.

In addition to the information found in the Robinhood app, the service provides links to articles of interest to investors both during normal trading and on weekends. While in-depth articles may not be especially useful for quick decisions during open trading, they can be useful for more thoughtful, long-form analysis over the weekend.

Robinhood allows users to deposit and withdraw funds on the weekends as well, though withdrawals may take several days to clear the trader’s bank. Instant deposits are also available on weekends and can be particularly useful for making quick cryptocurrency transactions.