Fidelity After Hours Trading Agreement: Everything You Need to Know
Fidelity Investments is a well-renowned brokerage firm that offers various investment options to its clients. One of the features that set Fidelity apart from its competitors is its after-hours trading service. This service allows investors to trade outside of regular trading hours, which is beneficial for individuals who want to react to news and events that may otherwise not be possible during standard trading hours.
However, before you start trading after hours with Fidelity, it is crucial to understand the terms and conditions of their after-hours trading agreement. This article will provide you with all the essential information regarding Fidelity`s after-hours trading agreement.
What is Fidelity`s After Hours Trading Agreement?
Fidelity`s after-hours trading agreement is a legal contract that outlines the rules and regulations of trading in the post-market hours. The agreement is a set of terms and conditions that every investor has to agree to before they can start trading after hours with Fidelity.
What are the Rules and Regulations of Fidelity`s After Hours Trading Agreement?
Fidelity`s after-hours trading agreement outlines several rules and regulations that investors need to abide by to trade after hours. Here are some of the crucial points that every investor should be aware of:
1. Eligibility to Trade: Not all securities are eligible for after-hours trading. Fidelity has a list of eligible securities that investors can trade in the post-market hours. Make sure you understand which securities are eligible before starting to trade.
2. Limited Liquidity: Liquidity tends to be low in the after-hours market, which means that the prices of stocks may fluctuate more than during regular hours. As a result, investors need to be cautious when trading after hours.
3. Risks and Volatility: After-hours trading comes with a higher degree of volatility, which can lead to losses. Fidelity`s after-hours trading agreement openly acknowledges that trading after hours comes with risks and encourages investors to consult with a financial advisor before participating in after-hours trading.
4. Trading Strategies: Fidelity`s after-hours trading agreement explicitly states that it is not suitable for all investors, and it is essential to have a well-defined trading strategy before entering the post-market hours.
5. Orders Execution: Fidelity offers different types of orders such as market orders, limit orders, and stop orders. However, not all order types are available for after-hours trading. Make sure you understand which order types are available before trading after hours.
Conclusion
Fidelity`s after-hours trading agreement is a crucial document that every investor should read thoroughly before starting to trade in the post-market hours. Reading and understanding the agreement will help investors make informed decisions while reducing the risk of losses. It is essential to remember that after-hours trading comes with higher volatility and risks, and it may not be suitable for all investors. Therefore, it is crucial to have a well-defined trading strategy and consult with a financial advisor before participating in after-hours trading.