пятница, 22 июня 2018 г.

Can you trade spy options after hours


What is after-hours trading? Am I able to trade at this time?


After-hours trading (AHT) refers to the buying and selling of securities on major exchanges after the specified regular trading hours. Both the New York Stock Exchange and the Nasdaq National Market operate regularly from 9:30 a. m. to 4:00 p. m. ET. Buy and sell orders in the AHT session can be entered and executed anytime between 4:00 pm and 8:00 pm EST.


At one time limited to institutional investors and individual investors with high net worth, AHT is now an option for the average investor as well.


The emergence of electronic communication networks (ECNs) ushered in a new era in stock trading. An ECN is an interface that not only allows individual investors to interact electronically, but also lets large institutional investors interact anonymously, thereby hiding their actions.


The development of AHT offers investors the possibility of great gains, but you should also be aware of some of its inherent risks and dangers:


Less liquidity - There are far more buyers and sellers during regular hours. During AHT there may be less trading volume for your stock, and it may be harder to convert shares to cash. Wide spreads – A lower volume in trading may result in a wide spread between bid and ask prices. Therefore, it may be hard for an individual to have his or her order executed at a favorable price. Small fish – While individual investors now have the opportunity to trade in an after-hours market, the reality is that they must compete against large institutional investors that have access to more resources than the average individual investor. Volatility – The AHT market is thinly traded in comparison to regular-hours trading. Therefore, you are more likely to experience severe price fluctuations in AHT than trading during regular hours.


AHT can be illustrated with an investor who would like to sell her shares of Goldman Sachs (GS) for $230.00 after hours. Due to the highly illiquid nature of the after hours market, the highest bid price from the sparse number of buyers is $220.00. She can either change her limit price to $220.00 to sell right away or she can keep her original price and run the risk of a partial order or a 'not-filled' order. At the end of the trading session at 8:00 pm, all orders that were not executed will be canceled.


We've covered the risks of AHT, but you should also be aware of the benefits. Having the ability to trade around the clock allows you to react quickly to breaking news stories or fresh information before market open the next day. Furthermore, although volatility is a risk associated with trading after hours, you may find some appealing prices during this time.


AHT has developed to the point where all interested investors, big or small, have an opportunity to do business outside of standard hours. Just remember that while there are benefits to participating in AHT, you should also be mindful of the risks.


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List of Options Which Trade After Hours (Until 4:15)


I noticed that the value of some of our portfolios was changing after the market for the underlying stock had closed. Clearly, the value of the options was changing after the 4:00 EST close of trading. I did a Google search to find a list of options that traded after hours, and came up pretty empty. But now I have found the list, and will share it with you just in case you want to play for an extra 15 minutes after the close of trading each day.


List of Options Which Trade After Hours (Until 4:15)


Since option values are derived from the price of the underlying stock or ETP (Exchange Traded Product), once the underlying stops trading, there should be no reason for options to continue trading. However, more and more underlyings are now being traded in after-hours, and for a very few, the options continue trading as well, at least until 4:15 EST.


Options for the following symbols trade an extra 15 minutes after the close of trading – DBA, DBB, DBC, DBO, DIA, EFA, EEM, GAZ, IWM, IWN, IWO, IWV, JJC, KBE, KRE, MDY, MLPN, MOO, NDX, OEF, OIL, QQQ, SLX, SPY, SVXY, UNG, UUP, UVXY, VIIX, VIXY, VXX, VXZ, XHB, XLB, XLE, XLF, XLI, XLK, XLP, XLU, XLV, XLY, XME, XRT.


Most of these symbols are (often erroneously) called ETFs (Exchange Traded Funds). While many are ETFs, many are not – the popular volatility-related market-crash-protection vehicle – VXX is actually an ETN (Exchange Traded Note). A better way of referring to this list is to call them ETPs.


Caution should be used when trading in these options after 4:00. From my experience, many market makers exit the floor exactly at 4:00 (volume is generally low after that time and not always worth hanging around). Consequently, the bid-ask ranges of options tend to expand considerably. This means that you are less likely to be able to get decent prices when you trade after 4:00. Sometimes it might be necessary, however, if you feel you are more exposed to a gap opening the next day than you would like to be.


I would like to tell you about one of our portfolios that might interest you. At the beginning of the year, we picked three underlyings that we felt would be at least the same at the end of 2015 as they were at the beginning. They were SPY (S&P 500 tracking stock), AAPL, and GOOG. If we are right, and they are the same or any higher in price when the Jan-16 options expire (on January 15, 2016), we will make exactly 52% on our investment. We made a single credit spread trade for each of these stocks, and if all goes well, the options will expire worthless and we won’t have to do another thing (except collect our 52% profit on that date). At this point in time, all three underlyings are trading quite a bit higher than where they were when we started, so they could actually fall quite a ways from here and we will still collect those same gains. This is just one of 10 portfolios that we carry out for Terry’s Tips subscribers. Each carries out a different strategy, and we update how each is doing every week in our Saturday Report. We welcome you to come on board and check them all out.


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