When the stock market is closed, and you have a position in a stock, your hands are tied. If an opportunity arises outside of market hours, you can’t take advantage of it, and worse, if you have to exit a position, you can’t until the market opens the next day.
But in the world of futures, you are free to make a nearly 24 hours a day, six days a week*.
Political events, surprise product announcements and natural disasters don’t wait for the stock market to open. And the reality is, we live in a global economy, many other markets affect the US market…and they all trade outside US market hours.
With a 24 hour market, you can react as the event unfolds. In the US market, the vast majority of tradable events happen between 7AM and 9AM before the markets open, and all you can do is wait, hope and pray that you’ll get a chance to seize the opportunity, or get out with minimal losses.
Okay, but does that mean that you have to stay glued to your screen?
Not at all…it means you have more options to take advantage of.
Let’s say you’re long the S&P 500 with an e-mini S&P contract, and you’re concerned that China’s PMI manufacturing report is going to be negative and drive your position lower.
Instead of waiting for the report, you could place a stop order several hours before the report is released. It’ll be working for you, while you’re enjoying your evening.
*Futures Market Hours: Open Sunday through Thursday at 6PM EST, and close Monday through Friday at 5PM EST. So each weekday, between the hours of 5PM and 6PM, futures markets are closed, and closed all day Saturday.