24-Hour Trading
Many investors are interested in 24-hour trading to access more market opportunities and trade around other time commitments or from a non-major time zone. This 24-hour trading guide will cover 24/7, 24/5 and extended-hours markets, the advantages and disadvantages of trading around the clock and how to compare 24-hour trading brokers. Find out how to get started with around the clock trading.
Brokers With 24-Hour Trading
24-Hour Trading Explained
24-hour trading is a quality of select markets that allows investors to trade around the clock. Traditional stock markets operate in a time window close to the working hours of the jurisdiction in which they are based. But due to the global aspect of modern online trading, investors from regions with a significant time difference can be subject to inconvenient market opening times.
As a result, some markets operate around the clock to allow global investors to trade at reasonable hours. These markets include forex and crypto. However, some more traditional markets, such as stock trading and options, operate under extended “global trading hours” (GTH) to provide limited trading opportunities for international investors.
Markets & Instruments
At this point, you may be asking, “what can I trade 24 hours a day?”. To help you discover 24-hour trading opportunities, our experts have analyzed the around the clock trading potential of significant markets.
Forex
Forex, or foreign exchange, markets pitch currencies from across the globe against each other. As a result, a 24-hour trading market is necessary for forex.
The forex markets operate 24/5 from Monday to Friday, using three overlapping regional market periods to allow this around the clock function to operate. The first market to open is the Australasian area, which encompasses the Sydney and Tokyo sessions. These markets span from 10 pm UTC to 9 am UTC.
The next session to take over is London-based, covering Europe. This session runs from 8 am UTC to 5 pm UTC.
The third and final session is the New York market, running from 1 pm UTC to 10 pm UTC.
Cryptocurrency
Crypto trading is the newest form of speculation on this list and trades around the clock, seven days a week. This complete 24-hour trading schedule is due to the decentralized nature of blockchains, with crypto designed to eliminate the traditional difficulties associated with international currency and data exchange.
As a result, 24/7 digital currency trading is a widely used strategy, with many investors using crypto bots to capitalize on additional opportunities via algorithms. However, investors should note that these hours normally only apply to trading spot crypto through an exchange. Crypto derivatives such as CFDs and binary options will sometimes have reduced trading hours, such as 24/5 hours.
Options
Most options contracts follow the regular market hours of their local exchanges and do not operate on a 24-hour basis. These market hours can make effective day trading or swing trading of options contracts difficult for investors based overseas from the traded market.
However, several key US options markets, such as the VIX, XSP and SPX indices on the CBOE exchange, are subject to global trading hours (GTH). These were introduced in 2021 and extended the daily trading hours to almost 20 hours. These extended periods allow investors from around the globe to trade options contracts at reasonable local times.
Futures
As with options markets, futures follow their local exchange hours. As futures are a global product based in many different jurisdictions in the US, UK, Europe and Asia, the lack of a 24-hour futures market makes foreign instruments challenging to trade for global investors.
Stocks & ETFs
Traders who wish to speculate on stocks in the Nasdaq, the SPY ETF and other global stock and ETF offerings will want to know if these instruments support 24-hour trading. Unfortunately, most stocks and ETFs cannot be traded around the clock and follow various stock exchange trading hours worldwide.
Many major exchanges from the US, UK and Europe operate extended “after-hours” markets. These consists of pre-market sessions, which can last up to 5 hours before the market opens, and after-hours sessions extending the trading day by up to 4 hours.
For example, the Nasdaq operates its pre-market from 4 am ET to 9:30 am ET, its regular market from 9:30 am ET to 4 pm ET, and after-hours from 4 pm ET to 8 pm ET.
While these extended hours offer international investors the chance to get involved in day trading stocks and ETFs, there are limitations on the types of trade that can occur during these hours. For example, traders must place limit, rather than market orders, and lower trading volumes can mean volatile prices.
Some stock trading brokers, websites and apps, such as TD Ameritrade, have taken this further and offered 24/5 trading on 10 ETF popular securities. This levels the playing field for global investors and allows US-based ETFs targeting global or non-US markets to trade during relevant new cycles.
CFDs
In addition to forex, plenty of other CFD markets are available to investors. CFDs are marketed as having 24 hours trading capabilities due to their 24-hour platforms and forex markets, but this varies depending on the specific asset and sometimes the broker.
For example, while some brokerage groups offer cryptocurrency CFDs 24/5, others provide a full 24/7 crypto CFD trading experience. Furthermore, while most index and commodities CFDs trade 24 hours, daily trading breaks are often included in this period. These range from single, 1-hour breaks to multiple intervals of up to 3 hours each, depending on the asset.
As a result, traders must research the specific market hours offered on each supported asset with a broker. This ensures that investors who favor 24-hour trading get as close as possible to their needs.
Binary Options
The final product we cover in this 24-hour trading guide is binary options. The possibility of 24-hour binary options trading is one of the reasons investors favour these instruments.
All of the binary options providers that our experts tested followed 24/5 forex trading hours. While using binary options platforms, we also discovered that some brokers offer extended OTC trading hours for stocks and commodities, covering weekend trading. However, these prices do not reflect actual market value, so investors should be cautious when speculating on OTC markets.
Advantages Of 24-Hour Trading
- More trading opportunities – Extended or longer market hours lead to more actionable trading signals for day traders to speculate on.
- Global trading – Having a 24-hour market means that investors from around the globe have the chance to trade popular financial assets.
- Additional price history and data – A market that trades for greater periods each day has more trading data that traders can use to build evidence-based strategies.
- Unique dynamics – 24-hour markets such as forex and crypto have unique dynamics allowing for alternative trading strategies.
Disadvantages Of 24-Hour Trading
- Missed events – Investors can miss out on trading opportunities on 24-hour markets while away from their computers or trading apps.
- Risky strategies – For full 24-hour market monitoring, investors often need tools like expert advisors (EAs) or automated trading bots. Running these programs unsupervised is risky.
- Trading/life balance – Traditional market hours allow investors to disconnect from the global markets. 24-hour trading markets can make it more difficult for retail traders to create firm boundaries.
24-Hour Trading Strategies
If you are keen to start round-the-clock trading, our experts have put together several 24-hour trading strategies for beginners.
Trading The News
Trading the news is a universal strategy, but it can be particularly effective when trading on a global market with extended hours such as forex, crypto or energies and precious metals CFDs.
Whether you wish to “buy the rumour, sell the news”, as many advise or trade on breaking news, 24-hour markets allow investors to watch and react to events at any time. It also gives traders a head start on what may effect the NYSE’s opening price, for example.
A downside of this strategy is that it is hard to automate, so bots may have difficulty pre-empting the market.
Forex Session Overlaps
Another 24-hour trading strategy is utilizing the higher liquidity and volume when two forex sessions overlap. These periods can amplify price movements based on global events, regional economic developments and other factors.
Historically, the period with the most volume is during the overlap of the London and New York sessions.
Trading Bots
Using a 24-hour trading bot or expert advisor (EA) when trading CFDs or crypto can allow investors to trade around the clock automatically. These bots have to be programmed with patterns or can be purchased using preset signals.
Most CFD platforms support EAs through platforms like MetaTrader 4 and MetaTrader 5, while crypto platforms such as Pionex allow clients to use over 15 integrated trading bots for free.
Crypto Spot / Futures Arbitrage
The 24/7 function of the crypto markets means that futures are traded as perpetual contracts across major tokens such as Bitcoin and Ethereum. Investors can use these perpetual contracts in combination with spot markets for the spot / futures arbitrage strategy.
Traders receive a premium for holding both a futures position and a spot position, which can yield over 15% annually. Of course, it is possible to do this manually, but traders can use pre-made bots in 24-hour trading for beginners and gain income passively.
24-Hour Trading Brokers
When it comes to 24-hour trading online, investors need to trade with a broker that supports around the clock trading with a 24-hour compatible platform. With this in mind, we have put together a guide on checking a broker’s trading hours and how to compare 24-hour brokers.
Checking Trading Hours
Checking the trading hours of assets with a particular broker is usually straightforward. For example, most forex, stocks and binary options brokers will display their trading hours on their homepage or in their “about us” section.
If investors cannot find this on the site, it is worth checking whether our experts at daytrading.com have reviewed them, as we cover trading hours in our comprehensive reviews.
However, some sites may not have this section and finding whether an asset is traded 24 hours may require some detective work. For instance, some binary options platforms will need to be inspected manually to see which assets are available on weekends or outside traditional trading hours.
For example, during the weekends, the Spectre.ai binary options platform provides around the clock OTC trading on equities but closes its forex markets – these operate 24/5 instead.
Comparing Brokers With Access To 24-Hour Trading
When comparing 24-hour brokers, there are several key aspects to consider:
Regulation & Security
A broker regulated by a reputable body such as the FCA or CFTC is highly desirable. These regulators ensure that brokers provide adequate protection to client funds and significantly reduce the chance of fraud.
In addition, additional security measures such as two-factor authentication (2FA) can enhance login security at 24-hour trading brokers.
Trading Platforms
Another significant factor when choosing a 24-hour trading broker is the platform(s) supported by the operator. Around the clock investors typically need their platforms to offer expert advisor (EA) or bot integration and be dependable and reliable.
Our experts recommend brokers that support the MetaTrader 4 or 5 platforms, though brokers with 24/7 trading hrs apps can also enable clients to trade around the clock.
Note, the top brokers also offer demo accounts or simulator profiles where you can test a new 24-hour trading platform.
Trading Fees
Trading around the clock should be low-cost through all good brokers, but ensure that there are no additional fees for trading after hours or on weekends. Swaps, or overnight charges, will be a consideration for CFD traders.
In addition, traders should check that a broker’s general fee structure is competitive, with tight spreads and low or zero commissions.
Additional Considerations
Before starting with 24-hour trading, investors should consider several additional things:
Education
While there are no massive differences while trading on a 24-hour market, some 24-hour-specific strategies require additional education. Traders can learn more about the dynamics of around-the-clock markets from books or a 24/7 trading academy.
Day Trading Rules
In certain jurisdictions, there are rules around intra-day trading. Investors that buy and sell in extended or 24-hour markets will want to take note of these regulations.
For example, in the US, the number of day trades allowed before being considered pattern day trading is three within five business days. Note that this does not apply to markets such as crypto or forex.
Tax
When trading in 24-hour markets, investments may be subject to short-term capital gains tax. However, note that in some jurisdictions, such as the UK, instruments like binary options and spread betting are not subject to taxes at all.
Consult a local tax advisor if you are unsure what your obligations are.
Final Word On 24-Hour Trading
Around the clock trading can offer investors several advantages. These significantly benefit investors that live in jurisdictions far away from major trading centres. Instruments such as forex, CFDs, cryptos, and popular options contracts benefit from 24-hour or extended hours.
Traders often use bots to automate their 24/7 security trading strategies. However, allowing systems to run unsupervised can be risky. Another drawback of 24-hour trading is potentially missing market movements outside of your time zone.
Use this guide to get started trading around the clock. And head to our list of the best 24-hour trading brokers to find the right platform for your financial goals.
FAQs
Can You Trade Forex 24 Hours A Day?
The forex markets use four overlapping global sessions to provide 24-hour trading to investors worldwide. Forex trading is possible 24/5 as the markets do not run on weekends.
Can You Trade Stocks 24 Hours A Day?
No stocks trade 24 hours a day. However, major exchanges in the US, UK, Europe and Asia run substantial pre-market and after-hours sessions, allowing investors with supporting brokers to trade up to 16 hours per day.
Is 24-Hour Trading Possible For Options?
No options markets are available 24 hours a day. However, some popular US options markets such as the VIX, SPX and XSP have global trading hours (GTH) of 20 hours.
Can 24-Hour Trading Markets Get Halted?
A trading halt can occur on the 24-hour forex or others markets due to high volatility or additional market circumstances. Crypto markets can also be halted due to blockchain updates, maintenance or unexpected outages.
Is A Day Trade Within 24 Hours?
By FINRA rules, a day trade is defined as a security purchased and sold within the same trading day. This definition is generally accepted in most major trading jurisdictions.