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Robinhood Extended Hours Trading (Pre Market and After Hours)
Robinhood extended hours trading fees, surcharge, time period. Entering broker pre market and after market orders in 2017.
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Robinhood Extended-Hours Trading Time and Fees
Besides buying and selling stocks and ETF’s during regular market hours, which are during the week from 9:30 am until 4:00 pm, EST, Robinhood clients can also trade during extended hours. The broker does require a Gold account to receive this privilege, however.
Hours
Robinhood’s pre-market session begins half an hour before the regular market opens. The broker’s after-hours period lasts from market close until 6:00 pm, EST. These sessions combined produce an extra 2½ hours of trading.
Gold Account
Robinhood requires investors who want to trade in these special periods to have a Gold account. This is a unique margin account, which differs from the margin accounts of other brokerage firms.
Instead of charging a percent of the dollar amount borrowed, Robinhood charges a flat $10 every month. This gives the account the ability to borrow a maximum of $2,000. The ability to borrow $4,000 costs $20 every month. So essentially, traders at Robinhood who want access to the extended-hours periods must pay at least $10 per month.
A Gold account also comes with instant reinvesting. This service allows traders to use the proceeds from a stock sale to immediately purchase other securities. The Gold service also offers instant deposits, where ACH transfers can be used right away, instead of after the normal three business-day wait. These are nice features that other Robinhood traders don’t have.
Trading During Robinhood’s Special Periods
Robinhood only accepts limit orders during the pre-market and after-hours sessions. If you submit a market order, the broker-dealer will automatically convert it to a limit order, and add a 5% collar to it. If you place a market order after the evening session closes, it will be sent to the regular period the following morning, bypassing the pre-market session.
Limit orders placed in a Gold account are automatically valid for the regular period and the extended-hours periods. Stop orders are not valid during extended hours.
Ups and Downs of Trading During Extended Hours
Robinhood reminds its clients that trading before the market opens or after it closes incurs additional hazards. These include lower liquidity, which can make it difficult to find a counter-party. Volatility is also often a problem. This can cause order fills to be further away from the stock price compared to the regular sessions.
Comparison
Other brokers don’t charge anything for trading during extended hours or require a special account. TD Ameritrade
is one example. On the flip side, Robinhood doesn’t impose any additional commissions for pre-market or after-hours trades. E*Trade imposes a 0.5¢ surcharge on these orders. Since Robinhood is already at $0 commissions, some investors may decide that the broker still offers the best value, even with a $10 monthly fee.
Robinhood’s pre-market session is shorter than Ally Invest’s, whose early period opens an hour before Robinhood’s.
Although Robinhood has some disadvantages here, it nevertheless does better than some brokers. Capital One Investing, for instance, doesn’t provide any extended-hours
trading.
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Updated on 8/26/2017.
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