I don't trade options so please excuse my ingnorance. But I understand option trading ends at 4pm Est. just like equities? Wouldn't it make sense for options trading to end 15 to 30 minutes later than equities trading so the people who got stuck in positions can use options to hedge that position overnight. Also it would allow options trading of stocks that report earnings afterthe close and therefore increase options trading volume. Why doesn't and option exchange extend their day a little longer? Or do they already? Thanks
Equities options cease trading @ 4 PM. Index options stop @ 4:15 . Check out SPX, NDX, RUT, ect. Also some of the index ETF options trade until 4:15 EST as well.
Well, if you were an options market maker, would you want to let people do whatever they wanted with the underlying closed?
Indeed, with the underlying thinly traded after hours, if traded at all, it would make hedging a position hard if not impossible. On the other hand, I say let the people do what they want. I don't see a reason why options can't trade after hours. Sure, you certainly wouldn't have the same liquidity, but if retail wants to trade with retail, then why not. This would definitely be interesting during extremely volatile times, such as earnings.. Oh the pandemonium that would ensue.. Of course you'd have some goober come in with a market order at 7 PM after watching Cramer, then bitch until the cows come home because he got reamed.