An AMO (After Market Order) allows traders to place buy or sell orders for stocks after regular market hours. It helps traders execute orders without having to monitor the market constantly. This order type is used primarily by traders who cannot participate during normal trading hours.
After Market Order Meaning
An After Market Order (AMO) is an order placed after the stock market has closed. It allows investors to schedule their trades in advance for execution when the market reopens. This order type is ideal for traders who find it difficult to place trades during normal market hours.
AMO orders help investors plan trades based on news or events that happen after the market closes. These orders get queued for the next trading day and are executed based on the opening price of the stock. This allows traders to react to significant market events, such as earnings reports or global economic news, which might influence stock prices overnight. Investors can avoid the volatility of real-time trading and focus on their strategies without the pressure of immediate market movements.
After Market Order Example
An After Market Order (AMO) can be placed when the stock market is closed, and the execution happens when the market reopens. For example, if a trader expects a company’s stock to rise based on overnight news, they can place an AMO to buy shares before the market opens.
For instance, a trader hears that a company has reported strong earnings after the market closes. They place an AMO to buy the stock at ₹500, and when the market opens, the stock is trading at ₹510. The AMO order will execute at the opening price, not at the ₹500 the trader had planned, reflecting the stock’s actual market opening price.
How Does An After Market Order Work?
An After Market Order (AMO) works by allowing investors to place trades after market hours. These orders are queued and executed once the market opens the next trading day. It ensures that traders can react to events that happen after trading hours without constantly monitoring the market during the day. Here’s how AMO works step by step.
- The trader places the AMO during the after-market hours.
- The order is queued until the next market opening.
- The system checks the availability of buyers or sellers based on the AMO placed.
- The order is executed at the market’s opening price.
Types Of After Market Order Work
There are different types of After Market Orders that allow traders to execute trades after the market closes. These order types provide flexibility to investors depending on their trading preferences.
- Limit Orders
- Market Orders
- Stop-Loss Orders
Limit Orders
Limit Orders enable investors to set a specific price at which they want to buy or sell a stock. The order is executed only when the stock reaches the set price at the market’s opening. This helps traders control the price at which their trade is executed, but there is a risk that the order may not be filled if the stock does not reach the desired price.
Market Orders
Market Orders, on the other hand, ensure the trade is executed at the market’s opening price, regardless of any specific price set by the trader. This provides certainty that the order will be filled, but at the risk of price fluctuations overnight.
Stop-Loss Orders
Stop-Loss Orders act as a protective measure, automatically triggering the sale of a stock when it falls to a predetermined price, thereby limiting potential losses. This type of order is especially useful during periods of high volatility, helping investors avoid further declines beyond their acceptable loss level.
Benefits Of Using After Market Orders
The primary benefit of After Market Orders (AMO) is that it allows traders to place buy or sell orders outside regular trading hours, providing flexibility for those who cannot actively participate during market hours. Other key benefits include:
- Convenience: AMO allows traders to place orders outside of regular trading hours. This avoids the rush during market hours. It is useful for those who cannot monitor the market during the day. Traders can place orders at any time after the market closes.
- Preemptive Reaction: AMO enables investors to react to important news after market hours. This can be company-specific or global events. It allows traders to prepare for the next session. This helps them gain an advantage in positioning for potential price movements.
- Reduced Time Pressure: AMOs give traders more time to plan their trades. They can make thoughtful decisions without the stress of real-time fluctuations. This helps investors avoid hasty decisions. AMOs allow for better strategy execution without immediate market pressure.
- Execution on Opening Price: AMOs ensure that orders are executed at the market’s opening. This gives clarity on when the trade will occur. However, the final price may differ depending on the opening price. Traders benefit from knowing when their order will be processed.
- Order Flexibility: AMOs support various order types, such as limit or stop-loss orders. Traders can choose the best type based on their strategy. This flexibility allows better control over how and when their trades will be executed. It suits both cautious and active traders.
Risks of Using After Market Orders
The main risk of using After Market Orders (AMO) is that the order may not be executed at the expected price. Since AMOs are executed at the market’s opening price, there can be significant price differences due to overnight volatility. Other key risks include:
- Price Gaps: The opening price may be different from the previous day’s closing price, leading to potential losses. This is especially common during periods of high volatility or significant news events.
- Low Liquidity: There may be fewer buyers or sellers during the opening, which can affect the order’s execution. As a result, the order may not be filled or could be partially executed.
- Order Delays: If the market is volatile, orders may not be executed immediately, resulting in further price changes. This delay can lead to missing out on favorable prices or larger-than-expected losses.
Regular Market Orders vs After Market Orders
The main difference between Regular Market Orders and After Market Orders (AMO) is that Regular Market Orders are placed during active trading hours, while AMOs (After Market Orders) are placed after the market has closed for the day. Other key differences between Regular Market Orders and AMOs:
| Parameter | Regular Market Orders | After Market Orders (AMO) |
| Time of Placement | During regular market hours | After regular market hours |
| Execution Time | Immediate during market hours | At the opening of the next market session |
| Price | Based on live market prices | Based on opening price the next day |
| Liquidity | High liquidity during market hours | Lower liquidity at the market opening |
| Order Processing | Orders are filled in real-time | Orders are queued and processed later |
| Price Gaps | Minimal or no price gaps | Possible price gaps due to overnight changes |
After Market Order Timings
The timing for placing an After Market Order (AMO) varies depending on the broker, but in most cases, AMOs can be placed between 4:00 PM and 9:00 AM the next day. This allows investors to plan and execute their trades outside the regular trading hours.
After Market Orders are held by the broker until 8:58 AM and then sent to the stock exchange at 9:00 AM. The orders are executed when the market opens at 9:15 AM, ensuring that the trade happens at the first available price during the session. For example, if a trader places an AMO at 6:00 PM after market close, the order will be queued and processed when the market opens the next day.
We hope that you are clear about the topic. But there is more to learn and explore when it comes to order types, and hence we bring you the other important order types that you should know:
| CNC vs MIS |
| CNC Order |
| MIS Order |
| Bracket Order |
| Cover Order |
| Limit Order |
| Market vs Limit Order |
| What is Portfolio in Stock Market? |
| Shares below 20 |
After Market Order Meaning – Quick Summary
- An AMO allows traders to place orders between 4:00 PM and 9:00 AM, after market hours, giving flexibility for those who can’t trade during regular sessions.
- After Market Orders let investors place trades after the market closes. These orders are executed when the market opens the following day.
- For example, a trader can place an AMO based on news after hours. The trade will execute at the market’s opening price the next morning.
- AMO orders are placed after market hours and are queued for execution when the market reopens, ensuring the trade happens once the market starts.
- There are different types of AMOs, including limit, market, and stop-loss orders, allowing traders to choose how their orders will be executed based on specific conditions.
- The main benefit of AMO is the flexibility it offers by allowing traders to place orders at any time, outside regular market hours.
- The main risk of using AMO is that the trade might not be executed at the expected price due to potential price changes overnight.
- The difference between regular market orders and AMOs is that regular orders are placed during trading hours, while AMOs are placed after the market has closed.
- AMO timings allow traders to place orders between 4:00 PM and 9:00 AM. The execution happens at 9:15 AM when the market opens.
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What Is An After Market Order (AMO) In The Share Market? – FAQs
An After Market Order (AMO) is an order placed by traders outside regular trading hours. It is executed when the market reopens the next day, allowing traders to react to overnight news or events.
AMO can be placed after the market closes, typically between 4:00 PM and 9:00 AM. The exact time frame may vary depending on the broker, but the order is executed when the market opens the next day.
To check AMO status on NSE, log into your trading account. Go to the “Order Book” or “Order Status” section, where you can view the details of all orders, including after-market ones, for review or modification.
In India, AMO orders can be placed between 4:00 PM and 9:00 AM the following day. Orders are executed when the market opens at 9:15 AM, following the overnight order processing by brokers.
To execute an AMO, log in to your trading platform after market hours. Choose the stock and place a buy or sell order. The broker will queue it and execute it once the market opens.
Yes, AMO orders can be cancelled before they are sent to the exchange. You can modify or cancel the order through your broker’s platform as long as it hasn’t been executed when the market opens.
No extra charges are typically levied for placing AMO orders. Standard brokerage fees apply, but you should check with your broker, as some may charge additional fees depending on their policies.
The validity of an AMO is only for the next trading day. If the order is not executed when the market opens, it expires and must be re-entered for the following trading session.
An AMO can be profitable if used strategically, allowing traders to act on overnight news and events. However, there are risks due to potential price gaps between the closing and opening prices.
