No, the stock market is not open on weekends. The New York Stock Exchange and Nasdaq both close at 4 p.m. EST on Fridays and do not reopen until 9:30 a.m. EST on Mondays.
This break in trading occurs every week, from late Friday afternoon until early Monday morning. Although you cannot trade stocks over the weekend, there are still ways to research investments and plan your trades for when the market opens again on Monday morning.
If you're new to investing, you may be wondering why the stock market is closed on weekends. After all, other markets, such as the bond and crypto market, are open for business even on Saturdays and Sundays.
The reason has to do with the way stocks are traded. Stocks are bought and sold on stock exchanges, which are businesses that match buyers and sellers of stocks. The two largest stock exchanges in the United States are the New York Stock Exchange (NYSE) and the Nasdaq.
These exchanges are open for business from Monday through Friday, but they're closed on weekends and holidays. That's because there are no trading sessions taking place on those days. Although you can't trade stocks on the weekends, you can still research investments and plan your trades for when the market opens again on Monday morning.
If you're interested in learning more about investing, we encourage you to check out our Investing 101 guide for beginners. This resource is designed for beginner investors and covers everything from the basics of stocks to more advanced concepts like risk management.
Below, we will cover when the stock market is usually closed in detail and why they are typically not open on weekends.
Does the Stock Market Close on Weekends?
The stock market is not open on weekends, with trading taking place from Monday to Friday. The reason for this is that stocks are bought and sold on stock exchanges, which close on weekends and holidays. Although you can't trade stocks over the weekend, you can still research investments and plan your trades for when the market opens again on Monday morning.
However, on all regular trading days, beginning at 4:00 a.m. ET and ending at 9:30 p.m. ET, there are pre-market (4:00 a.m. to 9:30 a.m.) and after-hours (4:00 p.m. to 8:00 p.m.) trading sessions available for investors to make bids once the normal market closing time has passed.
Why Are Stock Markets Closed on the Weekend?
The stock market is closed on weekends, despite the fact that almost all contemporary stock trades are done via electronic communication networks (ECNs) that can operate 24 hours a day, 7 days a week. There are several causes for this:
1. Weekend Closings Are Stock Market Tradition
The New York Stock Exchange (NYSE) was founded in 1792 and for most of its history it operated only during daylight hours on business days. It wasn't until 1962 that the NYSE moved to a five-day week, adding Monday and Tuesday evenings as well as Saturday mornings to its schedule. The exchange finally began operating around the clock in 1995 with the launch of electronic trading.
Still, despite the fact that trading could theoretically take place 24/7, the exchanges are closed on weekends. Part of the reason for this is tradition—the stock market has always been closed on Saturdays and Sundays, so there's no real reason to change things now.
2. The Weekend Provides a Needed Buffer
Another reason that the stock market is closed on weekends is that it provides a needed buffer between the end of one trading week and the beginning of the next. This gives investors time to digest the events of the previous week and prepare for the week ahead.
It also gives traders and market makers time to reset their positions and make sure they're compliant with all regulations. This break also allows for any news or announcements that came out after the markets closed on Friday to be digested before trading resumes on Sunday night.
Related: 12 Best Long-Term Investment Strategies to Grow Your Money
Why Can Some People Trade on the Weekend?
Although the stock market is closed on weekends, there are still some activities that take place. For example, you might hear about people trading stocks on the weekend via electronic communication networks (ECNs).
ECNs are basically computer systems that match buyers and sellers of stocks outside of traditional exchanges. These trades can take place anytime—including on weekends—but they're typically not completed until the markets open again on Monday morning. So, while it's technically possible to trade stocks on the weekend, it's not really practical or advisable to do so.
What Happens If You Buy Stocks on the Weekend?
If you buy stocks on the weekend, your trade will not be executed until the markets open again on Monday morning. This means that you could miss out on any gains or losses that occur over the weekend.
Of course, you can also place limit orders to buy or sell stocks on the weekends. These orders will be executed when the market opens on Monday morning at the price you specified, no matter what has happened in the meantime.
Why Trading Over the Weekend is Risky
While you can technically trade stocks on the weekends, it's not really advisable to do so. This is because the markets are closed and there is very little activity taking place. This means that prices can be more volatile and you could end up paying more or receiving less for your shares than you anticipated.
Additionally, there is always the risk that your trade will not be executed until Monday morning, at which point the stock price could have changed significantly. So, if you're thinking about trading stocks over the weekend, it's important to weigh the risks and rewards carefully before making any decisions.
Tips for Trading on Weekends
If you're determined to trade stocks on the weekends, there are a few things you can do to minimize your risk:
1. Stick to blue chip stocks: These are large, well-established companies with a history of stable prices and consistent performance.
2. Use limit orders: As we mentioned above, limit orders will ensure that you pay the price you want for a stock, no matter what happens over the weekend.
3. Be patient: Don't expect to make a quick profit by trading on the weekends. Prices tend to be more volatile and it may take some time to see any significant gains or losses.
4. Keep your position size small: Since there is more risk involved in weekend trading, it's important to keep your position size small. This will help limit your losses if the market moves against you.
5. Use stop-loss orders: Stop-loss orders are designed to limit your losses if the stock price falls below a certain level. So, if you're worried about a stock price dropping over the weekend, you can use a stop-loss order to protect yourself.
The Bottom Line
The stock market is closed on weekends because that's the way it has always been done. There is no real reason to change things now and there are some benefits to this system, such as providing a needed buffer between the end of one trading week and the beginning of the next.
However, just because the stock market is closed on weekends doesn't mean that trading stops completely. There are still some activities taking place, such as ECN trading, but these trades are not typically completed until the markets open again on Monday morning.
If you're thinking about trading stocks on the weekends, there are a few things you need to keep in mind. First, prices can be more volatile and you could end up paying more or receiving less for your shares than you anticipated. Second, your trade may not be executed until Monday morning, at which point the stock price could have changed significantly. So, before you trade on the weekends, make sure you weigh the risks and rewards carefully.
