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Robinhood Adds to Its Extended-Hours Trading — How to Reap the Benefits

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Mar. 30 2022, Updated 2:44 p.m. ET

The Robinhood platform allows you to invest in thousands of stocks and a variety of ETFs. The regular trading hours at Robinhood are from 9:30 a.m. ET to 4:00 p.m. ET. Investors at Robinhood have access to the regular trading session and extended hours. Extended trading hours are outside of regular trading hours.

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Robinhood’s extended trading hours are from 7:00 a.m. ET until the market opens at 9:30 a.m. ET, and from the market close until 8:00 p.m. ET. Extended-hours trading is characterized by lower liquidity volumes and higher volatility. Also, the spread between the bid and ask may be wider in extended-hours trading.

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What can clients do with Robinhood's extended hours?

With extended-hours trading, Robinhood clients can trade during the pre-market and after-hours trading session. Robinhood's pre-market session starts two and half hours before the regular market opens. The after-hours trading session lasts for four hours after the regular market close. These trading sessions combined produce an extra six and a half hours of trading.

According to Robinhood, “During the extended-hours session, the price displayed on a stock’s Detail page is the stock’s real-time price. Orders made outside market hours and extended hours trading are queued and fulfilled either at or near the beginning of extended hours trading or at or near market open.”

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You can trade in an extended-hours session to benefit from an earnings announcement or activity in foreign markets. Extended trading also helps if the companies you hold shares of generally announce quarterly earnings before or after the market opens or closes. The stock price can move significantly based on the positive or negative earnings announcement.

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European and Asian markets can also influence the stock prices on the U.S. markets. Activity in foreign markets generally happens outside of regular U.S. market hours. With extended-hours trading, you can take advantage of the significant stock price movements.

When considering E-Trade's pre-market and after-hours trading sessions, Robinhood offers investors the same flexibility to trade outside of normal market hours.

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How to enter extended-hours orders on Robinhood

Robinhood only accepts limit orders in the pre-market and after-hours trading sessions. The order would be executed if the stock is available at your lot size and target limit price. Robinhood will automatically convert a market order to a limit order and add a five percent collar to it to protect against any significant price movements.

If you submit a market order after the evening session closes, it will be sent to the regular trading session the following morning at 9:30 a.m. ET. Robinhood will not execute stop orders and trailing stop orders during the extended-hours trading session. The trailing stop, stop limit, and stop loss orders placed during the extended hours will be queued for the opening of the next regular trading session.

Robinhood is safe for investors since it is regulated by the SEC. Also, the investment firm is a member of the Securities Investor Protection Corporation (SIPC) and the Financial Industry Regulatory Authority (FINRA).

The Robinhood platform allows you to buy penny stocks or fractional shares of companies listed on the NYSE and Nasdaq. Robinhood trades are instant.

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