Before you trade, you should carefully read the Extended Hours Trading (U.S. Market) Risk Disclosure Statement (“Risk Disclosure Statement”) provided by Tiger Fintech (NZ) Limited (“TFNZ”).
TFNZ enables you to trade in trading sessions other than those of the regular trading hours (“Extended Hours”). The objective of this Risk Disclosure Statement is to provide basic information of Extended Hours Trading and to assist you to make an assessment of the associated risks and uncertainties. This Risk Disclosure Statement cannot disclose all the potential risks or other significant aspects of Extended Hours Trading. In light of the risks associated with Extended Hours Trading, you should undertake such transactions only if you understand the nature of the transactions and the extent of your risk tolerance and acceptable exposure to risk. Not all clients are suitable for Extended Hours Trading, therefore you should carefully consider whether such trading is appropriate in the light of your experience, objectives, financial resources, risk tolerance, and other relevant factors. You should carefully read the terms and conditions and trading rules associated and understand relevant responsibilities before you decide to trade. If in any doubt, you should seek professional advice.
1. About Extended Hours Trading
1.1 Extended Hours Trading Sessions
“Extended Hours Trading” refers to trading outside of regular trading hours. “Regular trading hours” generally mean Monday to Friday between 9:30 a.m. and 4:00 p.m. US Eastern Time.
Except for official Exchange and market holidays, TFNZ supports the following Extended Hours Trading sessions:
Overnight Session (Sunday to Thursday): from 8:00 p.m. to 4:00 a.m. US Eastern Time
Pre-market Session (Monday to Friday): from 4:00 a.m. to 9:30 a.m. US Eastern Time
Post-market Session (Monday to Friday): from 4:00 p.m. to 8:00 p.m. US Eastern Time, or from 1:00 p.m. to 5:00 p.m. US Eastern Time, in case of half trading days
TFNZ reserves the right, at any time and without notice, to amend the range of Extended Trading Hours and suspend trading in any or all securities in Extended Trading Hours regardless of pending client orders.
1.2 Securities Available for Trading
Not all securities are available for trading during the Extended Hours. While you can trade most of the exchange-listed stocks and exchange-traded funds, securities quoted on OTC Markets and those with upcoming corporate actions may not be available for trading during the Extended Hours. TFNZ reserves the right to review any orders that may be affected by corporate actions during the Extended Hours.
1.3 Available Order Types and Charges
Not all order types are available during Extended Hours. For example, fractional shares orders, short sale orders and market orders may only be placed in some sessions of the Extended Hours. Day orders placed during Extended Hours may be automatically cancelled when the relevant session ends. Commissions and fees are displayed on the official website of TFNZ, and the fee schedule may be modified from time to time without prior notice.
1.4 Order Handling and Trade Settlement
TFNZ will attempt to ensure that all orders received for execution are executed in a timely manner. However, there is no guarantee that your orders will be executed. Sometimes, your orders will be partially executed or not executed at all because the bid and offer prices of orders reflected in quotations are subject to change, and delays or failures in communications or other computer system problems may delay or prevent order execution.
During an Overnight session, TFNZ may send orders to its executing broker(s), which may route the orders to a single alternative trading system (“ATS”). During this session, the ATS generally is not required to display prices publicly and may have very limited liquidity and/or high volatility. In addition, orders placed during an Overnight session may not be price protected, which means that your order may be executed at a price worse than prices available at other execution venues and the market maker may execute your order as principal. The risks noted below for the Extended Hour Trading generally may be significantly higher during Overnight sessions, as compared to the pre- and post-market sessions.
If an order placed for “24H Trading” is not completely filled shortly before the end of its Overnight session, the unfilled part of such an order could be re-routed to an executing broker of the following market session subject to such an order’s time-in-force instruction(s). If a GTC (good till cancelled) order placed for “24H Trading” is not completely filled shortly before the upcoming Overnight session, the unfilled part of such an order could be re-routed to the executing broker of the following market session subject to the order’s time-in-force instruction(s). When an order is being re-routed as described in either of the two scenarios above, the order will not be available for (further) execution until the re-routing is completed. “24H Trading” may be suspended at any time without notice.
The trade date for orders executed during regular trading hours or during the pre- and post-market session will be the order execution date. However, please note that the trade date for trades executed during Overnight session is the date of the morning when the Overnight session ends (even if the trade is executed before midnight). Such trades will normally settle in accordance with the customary settlement time applicable to the market in which orders were executed.
2. Risks of Extended Hour Trading
Extended Hours Trading may not be suitable for all investors. You should consider the following points before engaging in Extended Hours Trading.
2.1 Risk of Lower Liquidity
Liquidity refers to the ability of market participants to buy and sell securities. Generally, the more orders that are available in a market, the greater the liquidity. Liquidity is important because with greater liquidity, it is easier for investors to buy or sell securities, and as a result, investors are more likely to pay or receive a competitive price for securities purchased or sold. Compared to the regular trading hours, there may be less market participants and thus lower liquidity in Extended Hours Trading. As a result, your orders may only be partially executed or not executed at all. You may not be able to buy or sell the securities at your preferred price or quantity.
2.2 Risk of Higher Volatility
Volatility refers to the changes in price that securities undergo when trading. Generally, the higher the volatility of a security, the greater its price swings. There may be greater volatility in Extended Hours Trading than in regular trading hours. Potentially, you may sustain greater loss since sometimes you may receive an inferior price when engaging in Extended Hours Trading than you would during regular trading hours.
2.3 Risk of Changing Prices
The prices of securities traded in Extended Hours Trading may not reflect the prices either at the end of regular trading hours or upon market opening of the next trading day. As a result, you may receive an inferior price when engaging in Extended Hours Trading than you would during regular trading hours. Moreover, the supply and demand indicated by orders during the Extended Hours are factors used to affect the opening price of the next trading day.
2.4 Risk of Unlinked Markets
Depending on the Extended Hours Trading system or the time of day, the prices displayed on a particular Extended Hours Trading system may not reflect the prices in other concurrently operating Extended Hours Trading systems dealing in the same securities.
2.5 Risk of News Announcements
Normally, issuers make announcements that may affect the price of their securities before or after regular trading hours. Similarly, important financial information is frequently announced outside of regular trading hours. In Extended Hours Trading, these announcements may be released when you are trading, and if combined with lower liquidity and higher volatility, may cause an exaggerated and unsustainable effect on the price of securities, leading to greater loss during the Extended Hours Trading.
2.6 Risk of Lack of Market Data
For certain derivatives, an updated underlying index value or intraday indicative value may not be calculated or publicly disseminated during the Extended Trading Hours. An investor who is unable to calculate implied values for certain derivatives in those sessions may be at a disadvantage to professional market participants. Many Extended Hours traders are professionals from large financial institutions, such as mutual funds, who may have access to more information/data than individual investors.
2.7 Risk of Wider Spreads
The spread refers to the difference in price between what you can buy a security for and what you can sell it for. Lower liquidity and higher volatility in Extended Hours Trading may result in wider than normal spreads for a particular security.
This Risk Disclosure Statement does not purport to disclose or discuss all of the risks and other significant aspects of Extended Hours Trading. In light of the risks associated with Extended Hours Trading, you should undertake such transactions only if you understand the nature of the transactions you are entering into and the extent of your exposure to risk. You should therefore consult your own legal, tax, and financial advisers before entering into any particular transaction. TFNZ’s offering of Extended Hours Trading service does not constitute a recommendation or conclusion that Extended Hours Trading is appropriate for you. You are responsible for familiarizing yourself with the Extended Hours trading of the relevant markets upon which you trade and for determining when to place orders for securities, how you wish to direct those orders, and what types of orders to use.
TFNZ may, from time to time, modify this Risk Disclosure Statement without prior notice. This Risk Disclosure Statement is written in both English and Chinese. In case of any discrepancies between the Chinese version and the English version, the English version shall prevail.