Extended-hours trading
Extended-hours trading is available from (04:00 p.m. to 05:30 p.m. ET), Eastern time, on days when the exchanges are open. (This may not apply on days when the exchanges close early or when trading is halted.)
About extended-hours trading
Trading through Vanguard Brokerage's extended-hours session is subject to the terms and conditions ("terms") and policies set forth by Vanguard Brokerage Services® and is subject to change without notice.
Vanguard Brokerage Services' extended-hours trading offers the ability to trade all National Market System (NMS) equity securities that have not been halted both before and after the regular market session. Vanguard Brokerage generally will not accept extended-hours trading orders over the telephone.
I. Policies
1. After-market trading
Session times
Session times are 4:00 to 5:30 p.m., Eastern time, every day the exchanges are open (this may not apply when the exchanges close early). For certain trading sessions around the holidays, early exchange closings at 1 p.m., Eastern time, will result in modifications to extended trading times.
Allowable order types
Limit orders only.
Order size
Odd lot (less than 100 shares), round lot (multiples of 100), and mixed lot (more than 100 shares, but not a multiple of 100) orders are acceptable. Maximum order size: 99,999 shares.
Order duration
Orders are in force only for the trading session during which they were entered and are automatically canceled at the end of the session.
Good-till-canceled (GTC) orders are not accepted in the extended-hours session.
Securities available
NMS equity securities eligible for trading include:
- Nasdaq Global Select Market.
- Nasdaq Global Market.
- Nasdaq Capital Market.
- Exchange-listed securities.
Note: Over-the-counter bulletin board (OTCBB), pink sheets, and securities traded on foreign exchanges are not eligible for extended-hours trading.
2. Execution
Extended-hours trades are routed to an electronic communications network (ECN) or participating exchange. Markets may be linked to additional electronic trading systems to improve the opportunity for your order to be executed.
Trades are executed by matching orders on the ECN with other available orders at the price you specify. Orders are ranked within the ECN first by price (better-priced orders first) and second by time (earlier orders at the same price level first). If a better price is available within a linked ECN, you may or may not receive the better price, depending on whether another order precedes yours.
Partial executions can occur. All orders placed during the extended-hours trading session expire at the end of that session if unfilled in whole or in part.
You should ensure that you are not entering duplicate trades (consider any trades you entered during the regular trading session that did not fill or for which you have not received a verified cancel status).
3. Types of orders
Only limit orders may be entered. Other types of orders and order qualifiers such as market, stop, all-or-none (AON), and fill-or-kill (FOK) are not currently available.
4. Short sales
Short sales are permitted in approved Vanguard Brokerage margin accounts during extended-hours trading sessions provided that the security is available to borrow.
5. Duration of orders
Orders placed during an extended-hours trading session are good only for that session. If an order is not executed, it expires at the end of that session and does not roll into the next regular or extended-hours session. Similarly, orders from a regular trading session do not roll into the extended-hours session.
6. Margin requirements
Margin requirements are the same as during regular trading hours, and margin trades may be placed only in an approved Vanguard Brokerage margin account. A stock's margin eligibility during extended-hours sessions is computed using the closing price of the previous regular market session.
7. Commission schedule
Commissions are determined by the commission schedule applicable to your brokerage account.
8. Halted trading
If trading is halted for a given security on the primary stock exchange, then that security will not be eligible for trading on the ECN. The rules of the Nasdaq and the stock exchange governing stock halts apply to the extended-hours trading sessions.
9. Settlement
For settlement and clearing purposes, trades executed during extended-hours trading sessions are processed as if they had been executed during the regular trading session. The standard two-day settlement process applies. For example, if your extended-hours order to buy is executed on Monday, the 23rd of the month, the settlement date is Wednesday the 25th, and payment is due at that time.
All transactions may be subject to the rules of the exchanges, ECNs, FINRA, and state or federal statutes and to the regulations of any governmental authority.
10. Canceling orders
You may attempt to cancel your order at any time before it's executed. If all or a portion of your order is executed before your cancellation is received, that portion cannot be canceled and you'll be responsible for settlement.
II. Associated risks
Certain risks may be greater than those present during standard market hours. These include:
1. Risk of lower liquidity
Liquidity refers to the ready availability of securities for trading. Generally, the more orders available in the market, the more liquid that market is. Liquidity is important because with greater liquidity, it's easier for investors to buy or sell securities, and as a result, investors are more likely to pay or receive a competitive price for securities purchased or sold. Because of the limited trading activity during extended-hours sessions, liquidity may be significantly less than during regular market hours. Lower liquidity may prevent your order from being executed in whole or in part or keep you from receiving as favorable a price as you might receive during regular trading hours. In addition, lower liquidity means fewer shares of a security are being traded, which may result in larger spreads between bid and ask prices and volatile swings in stock prices.
2. Risk of higher volatility
This term generally refers to the speed and size of changes in the price of a security. Generally, the higher the volatility of a security, the greater its price swings. There may be greater volatility during the extended-hours sessions than during regular trading hours, which may prevent your order from being executed in whole or in part or keep you from receiving as favorable a price as you might receive during regular trading hours.
3. Risk of changing prices
For extended-hours trading sessions, quotations will reflect the bid and ask prices currently available through the utilized quotation services. At times, there may be no orders entered for a particular security, so there will be no quote available. The quotation service may not reflect all available bids and offers posted by other participating ECNs or exchanges and may reflect bids and offers that may not be accessible through Vanguard Brokerage's trading partners. Buy and sell quotations may differ from closing prices at the end of the regular trading session as well as opening prices the next morning. Systems are not all linked; therefore, you may pay more or less for your purchases or receive more or less for your sales through a participating ECN or exchange than you would for a similar transaction on a different ECN or exchange.
4. Risk of unlinked markets
Depending on the extended-hours trading system or the time of day, the prices displayed on a particular extended-hours trading system may not reflect the prices in other concurrently operating extended-hours trading systems dealing in the same securities. Accordingly, you may receive a price in one extended-hours trading system that is inferior to the price you would receive in another extended-hours trading system.
5. Risk of news announcements
Normally, issuers make news announcements that may affect the prices of their securities after regular market hours. Similarly, important financial information is frequently announced outside of regular market hours. In extended-hours trading, these announcements may occur during trading, and if combined with lower liquidity and higher volatility, may cause an exaggerated and unsustainable effect on the price of a security.
6. Risk of wider spreads
This term generally refers to the difference between the buy and sell prices of a security. Lower liquidity and higher volatility during extended-hours sessions may result in wider-than-normal spreads.
7. Risk of order entry timing
All orders entered into and posted during the extended-hours trading sessions must be limit orders and are generally handled in the order in which they were received at each price level. You must indicate the price at which you would like your order to be executed. You will not buy for more or sell for less than the price you enter, although your order may be executed at a better price. Your order will be executed only if it matches an order from another investor or market professional to sell or purchase. Transactions transmitted by other investors before your order may match an order you were attempting to match from the ECN or exchange order book. This may prevent your order from being executed or keep you from receiving as favorable a price as you might receive during regular trading hours.
8. Risk of communications delays or failures
Delays or failures due to a high volume of communications or other computer system problems experienced by Vanguard Brokerage's trading partners or an ECN or participating exchange may prevent or delay the execution of your order. Vanguard Brokerage Services reserves the right to temporarily or permanently close an extended-hours trading session without prior notification in the event of system failure or unforeseen emergencies. Vanguard Brokerage will not be held liable for missed executions caused by system failure.
9. Risk of trading halts
News stories may have a significant impact on stock prices during extended-hours trading sessions. The Securities and Exchange Commission (SEC), FINRA, or one of the stock exchanges may impose a trading halt when significant news has affected a company's stock price. Any SEC-, FINRA-, or exchange-imposed trading halt will be enforced. Pending orders for a security will be held and reinitiated upon resumption of trading during that session.
10. Risk of duplicate orders
Duplicate orders may occur if you place an order in an extended-hours session for a security for which you already have an outstanding order in the regular trading session, even if that order is a day order. Orders executed during regular trading hours may not be confirmed until after the extended-hours trading session has begun.
11. Risk of partial executions
Orders placed during extended trading hours are entered through a participating ECN or exchange, which may be linked to other ECNs or exchanges. Because you cannot add qualifiers such as AON or FOK, your order may be filled in part, leaving you with stock left over to buy or sell. There is a risk that your remaining order may not be filled during the extended-hours session. An odd lot may not be represented in the displayed quote. This would occur in instances in which an order has an execution leaving an odd lot. There are no execution guarantees for an odd lot or the odd lot portion of a mixed lot order.
12. Change requests will not be accepted
You may not change your extended-hours order at any time before it is executed. Instead, the order must be canceled outright and replaced with a new one. Note that a cancellation or replacement may cause the order to lose its time priority.
13. Risk of lack of calculation or dissemination of underlying index value or intraday indicative value (IIV)
For certain derivative securities products, an updated underlying index value or IIV may not be calculated or publicly disseminated during extended trading hours. Since the underlying index value and IIV are not calculated or widely disseminated during the opening and late trading sessions, an investor who is unable to calculate implied values for certain derivative securities products in those sessions may be at a disadvantage to market professionals.
III. Terms and Conditions
- Vanguard Brokerage Services reserves the right not to accept an order for any reason at its sole discretion and will attempt to notify you if your order is not accepted.
- You may not trade against an order you enter.
- The maximum order size is 99,999 shares.
- Only certain securities will be eligible for extended-hours trading.
- Orders in the extended-hours session can be placed from 4:00 to 5:30 p.m., Eastern time.
- Vanguard Brokerage is not liable for delays in the transmission of orders due to a breakdown or failure of transmission, communication, or data-processing facilities, or for any other cause beyond our reasonable control.
- Transactions are subject to the applicable rules and regulations of the self-regulatory organizations and governmental authorities.
