Have you ever wondered why you usually can’t trade stocks on weekends? Is this a huge problem or is there something else going on? There might be a few reasons why stock trading doesn’t happen in the market on weekends but none of them are alarming. The most common reason for not trading stocks on Saturdays, Sundays, and Mondays is because it’s harder to trade when there isn’t as much liquidity in the market.
As you can see, the weekend does not always mean the end of things; it actually means that these are days that offer fewer opportunities to make money as a trader. There are also other reasons such as government holidays which may coincide with stock trading days or exchanges being closed during these periods which again makes this task difficult and more time-consuming.
Now, getting to the point…
Why no stock market on the weekends?
Well, there are several reasons why the stock markets don’t operate during weekends. One of the biggest reasons is that there are lower volumes of trading on these days. This means that even in case there is momentum in a particular stock, it will have less impact on the stock price since there aren’t as many buyers and sellers. When it comes to investing over weekends, most traders prefer to keep their cash safe from market risk and don’t bother with any type of trading or investing over this time period.
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Additionally, people tend to spend more time with family and friends when they don’t have to work so for them, investing isn’t even an option when it comes to weekends. However, when they are working, they have very little time to spend on any hobby or entertainment activity and investing is what they like to invest their time in.
It’s important that you understand that stock markets operate on the secular basis and their operations always remain the same (weekend trading open, late trading open and close), so don’t get confused.
Is it possible to lose money in the stock market on weekends?
There are a few instances when there is the possibility of losing money in the stock market on weekends. Let’s say that you hold a losing position and then suddenly, while you are enjoying your weekend, the price of your stock goes down drastically and you start losing even more money. The price keeps falling and by the time you come back to work, it has reached its all-time low.
The way I see it, there are 2 ways to avoid this situation: either sell before noon on Friday or buy stocks for extra trading days (usually during holidays).
You can also set your stop-loss points and not worry about these things. This way you will be able to stay away from this situation in the future and enjoy your weekend without the fear of losing money. You can set your stops for just one dollar or for a couple of dollars lower than your purchase price. It really doesn’t matter how much it is because the main concern here is to avoid losing more money than you should.
From my point of view, there is no reason to worry about this situation if you are careful and know what you are doing.
What would happen if stock markets were opened even on the weekends?
Well, it’s not something like the Globe’s economy would have collapsed. If the stock markets were opened on weekends, people would have even more investing opportunities. As simple as that. The only problem is that some people don’t have time to invest and they wouldn’t even invest on weekdays, so there wouldn’t be any change. Only some of the investors would say that it’s a good thing and it works well for them but you will always find people who don’t like changes.
This is how I see it:
If stock markets were opened on weekends there would be more money entering the market throughout the week because we all know that there isn’t as much liquidity in these times such as during the holidays or on weekends.
Also, during the weekends, normal people who do a 9-5 Job are in their holidays. So, it’s important to not distract them from their family time and let them enjoy their weekends.
I mean, who wants to work on weekends after all? There is no need to work on the weekends if you don’t want to because it doesn’t mean that you will earn more money. It would just be a simple way of earning additional time with your family, friends, or whoever you like the most.
Well, these are my thoughts on why there isn’t stock market open on weekends. Hopefully, this article has provided some of the insight as to why this happens and will help you understand. If there is something else that you have a question around, let me know below and I will do my best to try and answer it for you.
FAQs about stock market
1) Why stock market is closed on weekends?
-Because of several reasons including low volume of trades.
2) What is the closing price of the stock market?
-It’s the last price at which trade was executed in a market. It could be one of the days when it was open for trading or it could be on a date when there was no trading.
3) What is stop loss in stock trading?
-This is a price which once reached by stock, your order will get triggered and you will sell your shares to avoid further loss. This price can either be given by you or you can opt for a default stop loss of 3%.
Hope this article helped. Be sure to check out our other blogs related to Stock Market.
