What are the benefits and risks of trading while exchanges are closed?

Trading or holding positions outside regular market hours can provide benefits, but also involves different risk considerations, because market conditions may be different.

Trading outside regular market hours allows you to:

• React quickly to news: Respond instantly to earnings reports or major events, helping you manage risk more proactively.
• Trade on your schedule: Access markets outside regular hours, if you're in a different time zone or can’t trade during the day.
• Catch early price moves: Position yourself ahead of the market by acting on after-hours developments.
• Respond to global events: React to developments in international markets that may affect equities with global exposure.

Risks and factors to consider when markets are closed:

• Ongoing market exposure: Positions opened during regular market hours remain subject to price movements and market conditions during extended hours. Extended hours risks apply to all ‘24/5’ designated equities, regardless of whether a position was executed during regular market hours or extended hours.
• Lower liquidity: With fewer buyers and sellers, you might face wider bid-ask spreads and find it harder to execute trades at your desired price.
• Higher volatility: Less activity can lead to sharp and unpredictable price swings that may cause Stop Loss and Take Profit orders to trigger. Consider adjusting SL/TP levels for 24/5 sessions.
• News impact: Announcements released after hours can cause sudden and temporary price movements in a more volatile market.

If you’re considering trading equities labelled ‘24/5 Trading’, ensure you fully understand both the potential risks and possible advantages.