With technology changing the way we live and work, the concept of a normal work week and weekend has seen some unprecedented changes in recent years. This may have you wondering, with the advent of fintech stock trading platforms such as Questrade, if the same changes have taken shape in the financial markets.
In other words, can you trade stocks on the weekend using the popular, Canadian trading platform Questrade?
The electronic communication network (ECN) used by Questrade makes it possible to place trades from your account on the weekend. However, the trade you make will not execute until the market opens on Monday morning.
The normal hours for the Canadian stock exchange are 9:30 AM ET to 4:00 PM ET, Monday through Friday. This means that if you place a trade on Questrade after 4:00 PM on Friday, it will not execute until 9:30 AM on the following Monday.
Can You Buy Stocks On the Weekend With Questrade?
You can place orders to buy stocks on the weekend with Questrade. However, as just mentioned, these orders will not execute until the stock market opens the following Monday at 9:30 AM ET.
The Canadian market does not have any form of pre-market trading. Pre-market trading is a form of extended hours trading in which select securities can be exchanged outside of regular market hours.
However, U.S. stock exchanges do have pre-market trading from 7:30 AM to 9:30 AM ET. Therefore, if you have some U.S. listed stocks in your Questrade account, weekend trades may execute a bit earlier for you on the following Monday.
Related Financial Geek Article: 9 Reasons Why Questrade is Good for Beginners
Is It Smart to Buy Stocks On the Weekend?
There are arguments for and against buying stocks on the weekend.
The main argument for buying stocks on the weekend is that information knows no weekend.
For example, if a CEO of a company you are interested in releases a promising tweet on a Saturday (Cough Elon Musk Cough), you may want to place your order to buy immediately so that you get in on the action first thing when the markets open on Monday.
However, buying stocks on the weekend will likely result in increased volatility. This means that even though you want to buy at the price the stock closed at on Friday, there is no guarantee that you will be able to get that price come Monday morning.
This is because there are three components to every stock trade:
- Bid price – the highest price a buyer will pay for a share of stock.
- Ask price – the lowest price a seller will accept for a share of stock.
- Spread – the difference between the bid price and ask price.
During normal trading hours, the spread is usually very small, resulting in high liquidity. This means that when a buy order is placed, there is a seller readily available to fill the order at the given bid price.
However, the weekend usually causes the spread to increase, as both buyers and sellers have had time to digest information and adjust their bid and ask prices. This can make stocks less liquid when the market opens on Monday, and therefor buyers may end up having to pay higher prices than what they desired to when they initially made the weekend trade.
As a result, buying stocks on the weekend comes with increased volatility, which evidently leads to higher risk, so investors need to approach weekend orders with caution.
How to Decrease the Risk of Trading Stocks On the Weekend
If you want to decrease the risk of trading stocks on the weekend, you must understand the difference between a market and a limit order:
- Market order – you will buy or sell at the price dictated by the market.
- Limit order – you will buy or sell if, and only if, the conditions of your order (size, unit price) are met.
Related Financial Geek Article: How to Buy Canadian Stocks
If you set a market order, you may end up paying or accepting a price that is well off of what you thought you would be getting.
As a result, it is very important to set limit orders when trading stocks on the weekend. Setting a limit order on Questrade can be done using the following steps:
- Login to your Questrade account.
- Look up the stock or ETF in which you are interested in trading.
- Click the “buy” or “sell” button. This will bring you to the order entry interface.
- Choose the account you want to make the trade in. For many users, there will only be one account, so this will be a default step.
- Make sure that the dot next to “limit order” is selected and hit “next.”
- Enter the number of shares you would like to buy or sell and hit “next.”
- Enter how much you will be willing to pay or accept per share and hit “next.”
- You will then be taken to a confirmation screen to review your order. If everything looks good, click on “place order.”
The downside to using a limit order is that there is no guarantee that your trade will ever execute. If the price never reaches the bid or ask price denoted in your limit order, then the trade will simply not be completed.
However, having a trade that does not execute is often preferable to completing a trade at a price you wouldn’t want to buy it at.
In addition, if the limit order parameters are set at a price close to the previous market closing price, there is a high likelihood, given the high volatility in the first hour of trading, that the limit order will execute at some point Monday morning.
Can You Trade Stocks on Weekends Using Other Platforms?
If you hear about people executing trades on the weekend, you may be inclined to think that they are using a platform other than Questrade that allows for weekend trading. However, no Canadian stocks can be traded during the weekend, regardless of what platform is being used.
It is likely that any weekend activity is due to one of the following scenarios:
- They placed an order to trade, like you can on Questrade, over the weekend and mistook that for actually executing a trade.
- They are using a platform, such as Binance or crypto.com, that allows for the trade of cryptocurrency. The crypto market never closes.
- They are trading forex, as forex markets in different time zones may be open during the Canadian weekend.
The Bottom Line About Weekend Trading With Questrade
You cannot buy or sell stocks on the weekend using Questrade. Trades will only execute during normal trading hours, which are between 9:30 AM and 4:00 PM ET. However, Questrade’s ECN allows you to place trades over the weekend, which will execute when the market opens on Monday morning.
And that’s it! The more you learn the more you earn.
If you are interested in getting started with Questrade, I’d highly recommend it. Not only is Questrade a great platform for beginners, but as I talk about in my article here, it is a very safe platform.
As always, thanks for reading and I hope you found the information you were looking for.