Trading Hours
Definition
Trading hours define when a market is open for trading and when orders can be executed at normal liquidity conditions. Trading outside core market hours often involves wider spreads, lower liquidity, and higher execution risk. Broker trading-hour policies directly affect pricing, execution quality, and risk exposure.
In Plain English
In plain terms, trading hours are the times when a market is active and most buyers and sellers are participating. During these periods, prices update frequently and trades are easier to execute. Outside these hours, markets may be closed, partially open, or trading under special conditions set by the broker.
How It Works
- Each underlying market has official opening and closing times.
- Liquidity is typically highest during core trading sessions.
- Brokers align their trading hours with underlying market access, but may extend or restrict availability.
- During off-hours, brokers may still quote prices for certain products (such as CFDs).
- Spreads often widen outside core trading hours due to reduced liquidity.
- Orders placed outside trading hours may be queued, rejected, or executed at adjusted prices.
- Stop losses and margin calculations may behave differently during market gaps.
- Trading hours vary by asset class, region, and instrument.
Why This Matters for Traders
Trading hours affect execution quality, pricing, and risk. Entering or exiting trades outside core hours can lead to worse prices, higher slippage, and unexpected costs. For leveraged products, overnight or out-of-hours moves can increase margin pressure and trigger stop-outs. Understanding when markets are most liquid helps traders avoid avoidable execution risks.
Common Misunderstandings
- Markets trade continuously: most markets have defined open and close times.
- Broker trading hours always match exchange hours: brokers may extend or limit access.
- Off-hours trading offers the same conditions: spreads and liquidity often deteriorate.
- Stops protect fully outside trading hours: price gaps can bypass stop levels.
- All assets follow the same trading schedule: hours differ by market and region.
How This Affects Broker Choice
Trading-hour coverage is a practical differentiator between brokers. When comparing platforms, users should consider:
• Which markets are available during core and extended hours.
• How spreads behave outside primary sessions.
• Whether orders can be placed, modified, or cancelled when markets are closed.
• How stop losses and margin are handled across session boundaries.
• Transparency of trading-hour schedules by instrument.
From a monetisation and comparison perspective, trading hours influence suitability for different strategies and time zones, making them a natural inclusion in broker comparison tables and reviews.
Risks & Common Mistakes
• Trading illiquid markets outside core hours without adjusting risk.
• Ignoring spread widening during session transitions.
• Holding leveraged positions through market closures without accounting for gaps.
• Assuming stop losses will execute at expected levels after a market reopen.
• Choosing brokers without clear trading-hour disclosures.
Risk note: price gaps and reduced liquidity outside normal trading hours can increase losses and execution risk, especially for leveraged positions.
Real-World Example
A major stock index trades actively during local market hours.
• During the main session, spreads are tight and execution is reliable.
• Outside those hours, the broker continues quoting prices with wider spreads.
A stop loss placed before market close may execute at a worse price when the market reopens, reflecting overnight price gaps rather than broker error.
What to Check Before Trading
- What are the core trading hours for your instruments?
- Does the broker offer extended or overnight trading, and under what conditions?
- How do spreads behave outside main sessions?
- Are stop losses and margin handled differently during market closures?
- Can orders be placed or amended when markets are closed?
- Are trading-hour schedules clearly documented?
- Does the broker support your time zone and preferred trading times?
Related Concepts
Liquidity is usually highest during core trading hours.
Spreads often widen outside normal trading sessions.
Market gaps commonly occur between trading sessions.
Stop-loss behaviour can change around market opens and closes.
Holding positions outside trading hours may incur financing costs.
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Risk Warning: This website does not provide financial, investment, or trading advice. All information is for educational purposes only. Trading and investing involve substantial risk of loss. You should carefully consider your financial situation and consult with qualified professionals before making any financial decisions.