24 hour trading Robinhood refers to Robinhood's extended-hours trading feature, which allows users to trade certain stocks before and after standard market hours. This service operates from 4:00 AM to 8:00 PM ET daily.
While traditional stock markets operate from 9:30 AM to 4:00 PM ET, Robinhood's extended-hours trading lets users place orders outside these times. However, execution isn't guaranteed during these periods due to lower liquidity.
Robinhood offers two types of extended-hours trading:
During these times, only limit orders are accepted. Market orders are disabled to prevent unexpected executions at unfavorable prices.
Not all stocks are available for 24-hour trading on Robinhood. Generally, only exchange-listed stocks (NYSE, Nasdaq) with sufficient liquidity are included. Over-the-counter (OTC) stocks and most ETFs are excluded.
For example, you might find Apple (AAPL) or Tesla (TSLA) available for extended-hours trading, but smaller-cap stocks may not be included. Robinhood's platform shows which stocks are tradable during these periods.
While 24-hour trading offers flexibility, it comes with risks. Lower liquidity can lead to wider bid-ask spreads and price volatility. According to FINRA, after-hours trading may present unique risks compared to regular market hours.
I noticed this firsthand when trying to execute a trade on a small-cap stock during after-hours. The bid-ask spread was wider than during regular hours, making the trade less attractive.
Another limitation is that not all order types are available., only limit orders are accepted during extended hours. This restriction exists to protect investors from unexpected executions at poor prices.
Remember that extended-hours trading shouldn't be confused with continuous trading in other markets, such as forex or commodities. Each market has its own rules and operating hours.