Does anyone actually get a market price as a trade after hours? I mean any time I trade after hours (and I've only tried it a couple of times) there is a delay before the order is actually placed in the am, so any activity that happened the night before is 100% fruitless to the trader. Even a stop loss is not going to work due to the delay of that order until many seconds after open (in my experience).
So am I missing something? Is there an entire group that actually has orders fulfilled after the market closing and benefits from the earlier price? Or is this just a whole slew of really dumb people that continuously chase a price after hours thinking they will benefit but never do?
pre and after market trading
I don't really understand your question. Stop losses usually aren't allowed in after hours trading.
In general, after hours trading has much less volume/liquidity, therefore you have more delays, more volatility, and larger spreads. Sometimes one can benefit from this, sometimes not. But this is why you're limited to using limit orders.
I have placed a Limit order for a Trailing Stop loss. BUT, the order is not placed. It just sits in a queue waiting till the morning. It can take as much as 30 seconds after market open to actually place the order. So why bother doing it the night before? Why push a stock higher with a whole bunch of orders if your order isn't actually placed. Isn't that simply intrinsic value benefiting or hurting those who already own the trade?
Well, I personally wouldn't place orders the night before because too much can change from then until the open. But if you place your buy order well below the last price, you could get lucky and get a favorable fill in the first few minutes of volatility. Still, if you can, it's better to wait until the morning and SEE what the stock is doing at the open and then place your trade accordingly at that time.
No, I am talking about extended hours. As an example, the market closed, a bunch of people are placing orders for PCLN jumping the price way up thanks to a positive earnings report. As I understand it, that price jump is simply due to the activity of order placing but NONE of the orders are actually placed at a lower price. The are only placed in the am at the Market price after a certain delay. So all of those after hours/extended hours "orders" are of zero benefit, as I understand it. (I called a Fidelity guy to quiz him about it and he thinks they are all ignorant trades too.) But why would anyone, after figuring that out after the first or second time, ever bother with it again if there is no value?
In fact, it is the whole point of announcing earnings after the market closes, so you can't take advantage of the announcement. Of course there are earnings announced in the am, and if your quick to the trigger, you can get an order in and "maybe" catch a small charge out of it, but generally, it would still be the prior owners that would benefit or lose.
My guess is the only purpose for extended hours is for people that work all day, they come home place some trades and hold the trade hoping it will go the right way. It just makes zero sense to me.