Interactive Brokers has expanded its overnight trading offering to include Contracts for Differences, or CFDs on US stocks and ETFs. Interactive Brokers’ clients can now trade CFDs on US stocks and ETFs around the clock, five days a week.
The new service specifically allows them to deal during overnight trading hours, which run between 8:00 pm to 3:50 am ET in the US.
Who are Interactive Brokers?
Founded by its Chairmen, Thomas Peterffy in 1977, the US firm acts for all types of investors and traders, and has a four-decade-long focus on technology and automation, offering its customers sophisticated trading tools and advantageous execution. Interactive Brokers is known for providing automated trade execution and custody of securities, commodities, and foreign exchange instruments, in over 150 markets worldwide.
How many US stocks and ETFs are available for CFD trading?
Clients can choose from the 3,500 US stocks and ETFs that are available for CFD trading at Interactive Brokers during overnight hours.
This offering is particularly valuable to international investors and traders, as it should allow them to react to news and market events in real time, regardless of their local time zone.
After-hours trading should also help traders react to news flow, such as earnings releases, which are often made outside of regular trading hours.
What are the advantages of trading CFDs compared to traditional stock trading?
CFDs offer leveraged exposure to US equities, without the need for ownership of the underlying assets.
Using CFDs it’s possible to take long or short positions in stocks, with equal ease, and they can also be used to hedge or sterilise longer-term portfolios, during periods of market volatility.
CFDs can have lower margin requirements than traditional (collateralised) margin trading, allowing traders to manage their risk more effectively, and to optimize their capital efficiency.
However, it’s worth bearing in mind that there are financing costs associated with CFD trading, and as such, they are not suitable for long-term buy-and-hold strategies.
What did Interactive Brokers have to say about this new offering?
Milan Galik, CEO of Interactive Brokers, stated that this expansion is “a strategic enhancement due to the growing popularity and increase in overnight trading volumes”.
He also emphasized that the firm’s clients can now utilise CFD leverage, during overnight trading hours, which should help to facilitate swift responses to market movements, and the optimization of trading strategies, at any time in the trading day.
Interactive Brokers has country-specific links on its websites for more information on overnight trading in the United Kingdom, Europe, Singapore, Australia, and Japan.
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