Limited Liquidity and After-Hours Trading


Q.: Are you able to trade CFDs even after-hours or when the underlying market is closed?

A: Some providers will offer after-hours trading or even offer trading over the weekend. However, do not that there are extra risks if the CFD broker allows you to trade when the market is closed. In particular, you can't check how CFD prices compare to market prices,, which could result in price distortions.

 

Q.: If there is limited liquidity in a market, can you still trade CFDs over that asset?

A: In some cases yes. Being able to open and close trades even in cases where there is little or no trading going on may be useful if you have an open CFD trade that you wish to close. However, the CFD provider is likely to apply wider spreads or your trading may result in re-quotes, which can affect your profits and losses. Also, keep in mind that CFD providers have the right to refuse to accept a trade, so it is better to stay away from illiquid instruments.


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