The stock market has a wide range of trading after hours.
But did you know that you can trade Options after hours for big profit.
In this article, we bring you a step-by-step guide on how to partake in After hours Options trading and live to tell your friends about it.
Table of Contents
After Hours Options Trading | Market Regular Hours
The NYSE market has different open hours for the stocks and options.
Let’s first examine the standard hours of operation for regualr stocks.
Is The Stock Market Open on Weekends ?
The question about the stock market being open on weekends is quite popular.
They answer is NO.
The US stock market is closed on weekends even though for avid traders, the cryptocurrencies markets are open 7 days a week – 24h around.
The US stock exchange opens each weekday ( Monday through Friday) at 930 am Eastern time and closes at 4pm EST except on holidays..
Because there are three time zones within the continental US so for those on the west Coast, this means waking up relatively early at 630AM.
I am one of those since I even host a Live day trading pre-market Analysis as depicted in the video below.
What is the Best geographical location to trade from ?
In our Discord group of traders, we have traders from all over the world.
Some are in Singapore where the market will open in the middle of the night.
Others are in Europe (London , Paris or Bruxels) where it is the middle of the afternoon at the open.
If I had the choice right now, I would rather be trading from that part of the world.
I had the opportunity to do so while in Africa for two months in 2020.
That schedule was pleasing to me because you actually will have time to wake up , perform others tasks because embarking in a very long trading session of 6.5 hours.
By contrast, most Asian markets do include a break/pause during their trading day.
That is quite nice.
What is After Hours for the stock market ?
After hours trading is the time after the market has closed for regular hours.
Extended Hours Trading
Most commonly, After hours is referred to inside your broker trading platform as Extended hours.
Which bring the question, which brokers allow extended hours trading.
The main ones Robinhood, TD Ameritrade, E*TRADE and Webull have extended hours trading for all stocks.
For stocks, this start at 4PM Eastern time all the way to 8PM Eastern time.
We could also consider the timeframe before the market opens as after hours.
Typically, traders can start trading with most brokers at 7am Eastern Time meaning 2.5 hours before the official opening of the stock market.
This window of trading is know as pre-market.
Can you Trade Options in Pre-Market ?
Pre-markets goes from 7am Eastern time to the Opening bell at 930am Eastern time.
In pre-market, traders have the opportunities to get stocks at a cheaper price should a stokck be trending with bullish momentum.
However, the drawback is often the lack of liquidity and one can run the risk of crossing the spread.
This means that the difference between the bid and the Ask this too big to ensure an easy buy or sell.
During this window of trading, options cannot be traded.
Nonetheless, traders can initiate options trade that their brokers will put in a queue and ready to be traded starting at 930am Eastern Time.
Can you Trade Options in After hours
All options stop trading exactly at 4PM Eastern each Day Except for the ETFs.
ETFs are Exchanges Traded Funds.
You can trade Options after hours on ETFS all the way to 4:15PM Eastern Time.
The main ETFs that you can trade are SPY, QQQ, IWM and DIA.
My personal favorite is by far SPY because it presents us a unique opportunity to trade its Options for profit on Expiration Days.
SPY options have 3 days of Expiration each week: Monday, Wednesday and Friday.
The rest of the stocks and ETFs feature expiration on Fridays only except for end of the quarters for QQQ, IWM and DIA.
How To Trade SPY Options After Hours
SPY options are very liquid by nature because a great deal of traders are always trading them.
Then add to this the fact that on expiration days, options are always very cheap and we have a dream scenario to make money very late into the session.
You Can Be a Stock Market Genius
The profession of trading the stock market is just like any other discipline.
The time spend studying it will increase your knowledge to the point of becoming an expert and thus you can become a stock market genius.
One that can put together a strategy based on after hours study.
For now, let’s use share with one our very one strategy trading options after hours that is bound to make you look like a genius for your friends at least.
Should you decide to trade options in after hours, here is our main recommendation.
Step # 1. Choose an Eligible ETFs. We prefer SPY on Mondays, Wednesdays and Fridays.
Step #2. You have an Extra 15 minute after the official market has close. You can either do an Option day trade on SPY or pick the next available expiration Day.
#Step 3. Apply our strategy detailed in the video below.
After Hours Options Price
If you are wondering how to calculate option price after hours, the main thing to remember is that it is a very short window of trading.
So meaning the time decay is even more impactful.
As such, option price after hours would be very voaltile.
This is a great thing when you are on a winning trade and making more money.
But it can be very disheartening when the direction suddenly change in after hours and the price of the option with it.
Here is our Video on Options Trading after hours on ETrade featuring the option price violent volatility.
We shared what is the best way to trade Options after hours with our proven strategy on SPY on Expiration days.
The return depicted in the video can be quite impressive thus making this one of our favorite way to generate 10-Baggers options profit.
We invite to check out our other techniques on making money trading options consistently with our 10-Baggers Trading System.