To: Jeffery E. Forrest who wrote (13432 ) 3/7/1998 4:06:00 PM From: Moonray Respond to of 22053
You, too, can trade stocks after hours But dealing in shares after markets close has its own perils CNBC - CHICAGO, March 6 - It was a busy week for stock market investors. More than once, market-moving news came out after the market closed, including Intel's bombshell announcement of slower-than-expected chip sales. Individual investors used to have to wait until the open of trading the next day to act. But no longer. THE MARKET IS closed, and some news has come out on your stock. What do you do? Until recently, unless you were a professional money manager or institutional stockholder, your options were limited. But today, you can call your broker. PT Discount Brokerage in Chicago, for example, is one of a handful of brokerages letting individual investors in on after-hours trading. "It's like what the big boys could only get," PT's Stephan Schuetz said. "Now (individuals) have that advantage as well." For half an hour before the open, and two hours after the close, PT and others offer individuals access to Instinet, the computerized system where the big institutions do their trading after hours. PT charges one-sixteenth, or about 6 cents a share, for the service, on top of the regular $35 fee per trade. Same thing for trading on SelectNet, the Nasdaq's after-hours system. And more investors are using the service, especially when companies like Intel and Motorola warn about earnings. "The entire (semiconductor) sector is affected by these announcements," Schuetz said. "And therefore it creates a lot of activity in after-hours trading." Other brokerages are expanding their hours, too. Charles Schwab offers after-hours Instinet and SelectNet trading on orders of a 100 shares or more. But before you enter into this after-hours world, the experts say there are a few things you should know. For one thing, this is different than trading on a stock exchange. Instinet is like a computerized swap meet, matching buyers with sellers. It's not regulated the same as the stock market and prices can move erratically. If there's bad news, for example, you'll likely see many more sellers than buyers, driving the price lower than it might be the following day as more sellers emerge. And because trading is thin, it's hard to get good information on what prices others are getting for their shares - quotes aren't as good a guide as they are during regular trading hours. What's more, experts warn, you still might not be getting much of a jump. "Generally speaking, you're going to get the information way after the fact that institutions have gotten it," said John Markese, research director at the American Association of Individual Investors. Nonetheless, after-hours trading for individuals is increasingly popular. PT Discount, which started its service two years ago, says it now makes up about 7 percent of the firm's business. So today, trading doesn't just happen between the opening and closing bell. It can also happen between the close and the open. o~~~ O