Trading stocks is a very popular investment method, but you can only sell stocks at certain times. Discover whether you can sell stocks on the weekend and what other options you have.
No, you cannot sell stocks on the weekend, as the market is closed. However, you can get around this somewhat by trading markets in other time zones or using after-hours and pre-market trading. You can also use ECNs (Electronic Communication Networks) to trade on weekends.
Explore why the stock market is closed on weekends. Then, take a closer look at the other options you have if you want to trade stocks or another asset on the weekend.
Can You Sell Stocks on the Weekend?
The short answer is that you cannot sell stocks on the weekend because the stock market is closed. But there are some ways that you can get around this, at least to some extent.
The Stock Markets Are Closed on Weekends
As mentioned, the reason that you can't sell stocks on the weekend is that the major stock markets are closed. Most close from Friday afternoon to Monday morning. The two largest stock markets, the New York Stock Exchange and the Nasdaq Stock Market, trade from 9:30 am to 4 pm Eastern time on weekdays.
As you look at major stock markets around the world, most have similar hours in their local times. For example, the Shanghai Stock Exchange is open from 9:30 am to 11:30 am and 1 pm to 3 pm in the CST time zone. This includes a lunch break from 11:30 am to 1 pm.
Or the Tokyo Stock Exchange operates from 9 am to 11:30 am and 12:30 pm to 3 pm in its local JST time zone. This includes a lunch break from 11:30 am to 12:30 pm.
Why Stock Markets Close on Weekends
There are a few main reasons that the stock market closes on the weekend:
- It is a tradition started when people traded on the stock floor and couldn't be there 24/7.
- It offers a buffer to prevent widespread panic.
You Can Engage in Pre-market and After-market Trading
While the stock market isn't open outside of its hours, most offer pre- and after-market trading. This usually lasts about four or five hours before and after the market opens. The caveat is that there is not usually a major benefit to trading in these hours. It is really just helpful for those who can't trade during normal market hours.
On top of that, there are some risks with pre-market and after-market trading. To start, you risk the market being more volatile right after a relevant news announcement. The limited trading volume during these hours leads to more volatility. There is also a risk that pre- and after-market trends won't be reflected during normal market hours. This may lead to investments that don't perform as you expect.
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Some Traders Can Take Advantage of Extended After-hours Trading
If you have a lot of cash, then you may be eligible for extended after-hours trading. However, this is not an option for most people. You can get around this by using an ECN (electronic communication network). ECNs connect traders with each other for private trades.
The biggest disadvantage of this method is the high fees. ECNs are known for having high account fees as well as high commission fees.
You May Be Able to Trade Privately
You can also sometimes trade privately. This would require some type of computer system to sell to or buy from another person directly.
While this is possible, it is extremely risky. You will never know why a private investor wants to buy or sell the stock. You will also have limited information available at your disposal.
You Can Do Some Weekend Trading by Taking Advantage of International Markets
The most obvious way to trade stocks on the weekend is to take advantage of time zone differences and international markets. For example, an American could trade the Shanghai Stock Exchange to sell stocks on Sunday.
Of course, this has limitations. You will still be limited by the market hours of each stock exchange. At most, this typically will only add about half a day to your trading in each direction.
There is also the fact that you have to be awake to trade at odd hours. Will you be awake and alert enough to make informed trades?
Trade Middle Eastern Markets
One category of markets that is popular among those looking to trade on the weekend is the Middle Eastern stock markets. That is because they use the Islamic Calendar, meaning their weeks begin on Friday, not Monday. As such, a business week goes from Friday to Wednesday. The result is that you can trade on Saturday and Sunday.
This option will require you to work with a broker who can handle international transactions. It will also likely involve splitting your investments across multiple markets. For example, you may have some assets in the Dubai Financial Market (DFM) and some on the NASDAQ or NYSE. This limits your investment opportunities within each market but adds diversification and lets you trade all week.
Many Asian Markets Also Have a Different Work Week
You can also do something similar with many of the Asian stock markets. Many of these will also run on different workweeks, letting you trade during American weekends.
Should You Try to Trade Outside of Regular Market Hours?
Because there are ways to get around the market being closed on weekends, many investors wonder if they should trade outside of regular market hours. Unsurprisingly, there are both pros and cons to doing so.
Pro: Flexibility to Fit Your Schedule
The biggest advantage is that you would be able to trade based on your schedule instead of when the market is open. This is especially helpful for amateurs who likely have day jobs.
Pro: New Information Comes Out on the Weekend
Another advantage is the fact that new information frequently comes out over the weekend. If you trade on the weekend, you can trade with this information in mind instead of having to wait until Monday. That lets you act early and make the most of the trade.
Pro: Occasional Unique Opportunities
Although it is never guaranteed, you may find yourself with rare opportunities if you trade on the weekend. This comes from the fact that many of the weekend traders are major investors who may be able to include you in a deal. That being said, you should not count on this.
Con: Usually High Fees
As mentioned when talking about ECNs, you are very likely to have high fees if you decide to trade on the weekend. For most traders, the cost of trading via an ECN or using another alternative to trade on the weekend will be more than the profits from doing so. That is one of the main reasons that few casual or amateur traders find it worthwhile to trade on the weekend.
Con: You Can't Trade Everything You Want
When you trade during market hours, it is safe to assume that your order will be executed at some point. However, this is not the case when trading over the weekend. Your ability to buy and sell stocks is limited to the ones in the open markets or those that other private investors want to trade.
This lack of available options may mean that you make trades that are not as beneficial to you as those you make during the week. That, in turn, increases the chance that you will spend more on extra fees than you would make.
Con: High Volatility
The other result of there being lower trader volume on the weekend is that the market will be more volatile. This volatility makes investing in stocks on the weekend riskier.
Con: Execution Risk With ECNs
Most people who use a workaround to trade on the weekends will do so with ECNs. If you do, then a major risk is execution. Many ECNs have low volume, which means that your order doesn't process as quickly. By the time you buy or sell the stock, the price may have changed significantly.
What Assets You Can Trade on the Weekend
We've established that there are limited methods of trading stocks on the weekend, but they can be complicated and expensive, so they are not for everyone. But what if you want to be able to trade on the weekend? Then, you may want to look at other assets instead of stocks.
The following financial markets are open 24/7, including weekends:
As a note, however, only some forex markets will be open 24/7. Many will be open 24/5, but you can find international ones that run 24/7.
What Else to Do on Weekends – Research and Plan Trades
The other thing to remember is that just because you can't buy or sell stocks on the weekend, that doesn't mean you have to ignore your portfolio. The weekend is the perfect time to catch up on your technical analysis and news reports. Take this time to create a tentative plan for the upcoming week, with the knowledge that it may change.
The major North American stock markets close on the weekends, so you cannot sell stocks on the weekend. You can get around this with ECNs or by trading international markets that are open. That being said, both of those actions come with risks, and few amateur traders will find them beneficial. You are probably better off just researching stocks on the weekend or looking for a 24/7 market, like cryptocurrency.
Shawn Manaher is a former financial advisor, has founded 5 online businesses, and is a coach, speaker, podcast host, and author. He's been featured on Forbes, The Consults Corner on TAE Radio, The Writing Biz, What's Your Story, and more.