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What is an After Market Order (AMO) in the Stock Market?

What is an After Market Order (AMO) in the Stock Market?
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The share market is a dynamic environment that operates within specific trading hours, but what happens when investors want to buy or sell securities outside of those hours? This is where an After Market Order (AMO) comes into play.

 AMO is a useful tool for investors who are unable to actively trade during regular market hours or for those who wish to react quickly to news or events occurring outside of the regular trading session.

If you are curious to know more about the After Market Orders then stick to this blog till the end!

What is AMO Order in Share Market? 

The AMO full form is After Market Order is a term used in the financial markets to describe a type of order placement that allows investors to buy or sell securities outside of the regular trading hours. It provides an opportunity for investors to participate in the market and take advantage of any price movements or news developments that may occur after the regular trading session ends. Now that we know what is AMO in share market, let us learn more about how it works:

After Market Order Timing

AMO enables investors to place orders for stocks, mutual funds, or exchange-traded funds (ETFs) for execution during the extended trading hours, which typically occur before the market opens or after it closes. The specific timings for AMO may vary based on the rules and regulations of the exchange or trading platform being used.

Exchange / PlatformPost-Market Timing
BSE03:45 PM – 08:57 AM
NSE03:45 PM – 08:59 AM

Types of After Market Orders

When it comes to After Market Orders, there are a few types you should know about:

Market Orders

  • With market orders, you’re telling your broker to buy or sell a security at the current market price.
  • During After Market trading, a market order means you want to execute the trade right away, grabbing the best available price at that time.
  • Keep in mind that since speed is prioritized over price, the actual execution price may differ from the last traded price.

Limit Orders

  • Limit orders allow you to set a specific price at which you’re willing to buy or sell a security.
  • In After Market trading, a limit order means you’ve set a maximum buying price or a minimum selling price.
  • Your limit order will only be executed if the price reaches your specified level during the After Market session.

Stop Orders

  • Stop orders are handy for protecting against potential losses or triggering a trade once a certain price level is reached.
  • During After Market trading, a stop order becomes a market order placed, when the stop price you’ve set is reached.
  • If you place a stop order to sell, it should be below the current market price. For a stop order to buy, set it above the current market price.

Features of After Market Orders (AMO)

The following are the features of After Market Orders (AMO):

  • Market or Limit Orders: AMOs provide the flexibility to place either market orders or limit orders. Allowing investors to choose their preferred execution method.
  • Modification and Cancellation: Investors have the option to modify or cancel their AMOs, giving them control over their trading decisions even after placing orders.
  • Exclusion of Bracket and Cover Orders: Unlike regular trading sessions, AMOs do not support bracket orders or cover orders, limiting the range of order types available.
  • Absence of Stop Loss and Disclosed Quantity Orders: AMOs do not accommodate stop loss orders or disclosed quantity orders, which are common order types in standard trading.
  • Exchange-Specified Price Range: The price range for limit orders in AMOs for a specific stock is determined by the exchange, ensuring transparency and regulatory compliance.

How Do AMO Orders Work?

Here’s how AMO orders work:

Timing

AMO orders can be placed after the market closes or before it opens. The exact timings may vary depending on the trading platform or brokerage you use. Typically, AMO orders can be placed in the evening after market hours and remain active until the pre-market session or regular market hours begin the next day.

Order Placement

To place an AMO order, you need to log into your trading account or use the trading platform provided by your broker. Select the stock you want to trade and choose the order type (market, limit, stop, etc.) as per your preference. Enter the number of shares you want to buy or sell and set the price or trigger level if applicable.

Execution

Once the regular market hours begin, the exchange matches the AMO orders with the corresponding buy or sell orders available in the market. The AMO orders are executed at the best available price during the regular market session. It’s important to note that the actual execution price of an AMO order may differ from the last traded price or the price you set as it depends on the market conditions and available liquidity at the time of execution.

Order Confirmation

After your AMO order is executed, you will receive a confirmation from your broker, usually via email or through the trading platform. The confirmation will include details such as the executed price, quantity, and any applicable charges or fees.

Order Modifications and Cancellations

In most cases, you can modify or cancel your AMO order until the regular market hours begin. However, it’s essential to check the specific rules and limitations set by your broker or trading platform.

How to Place an After Market Order (AMO)?

Here are the steps you need to follow to place an After Market Order (AMO): 

  • Choose a Brokerage that Offers AMO: Look for a brokerage that supports After Market Orders (AMO) and provides the necessary functionality.
  • Open a Trading Account: If you don’t already have a trading account with the chosen brokerage, open one by completing the required account opening process.
  • Get Familiar with the Trading Platform: Take some time to explore and understand the trading platform provided by your brokerage. Make sure you know how to access the AMO order placement feature.
  • Note the AMO Timings: Check the specific timings designated by your brokerage for placing AMO orders. These usually occur after regular market hours or before the market opens.
  • Access the Order Placement Interface: Log in to your trading account and find the order placement interface in the trading platform’s menu or toolbar.
  • Provide Order Details: Select the stock or security you want to trade and choose the order type (market, limit, stop, etc.) based on your strategy. Enter the number of shares or units you wish to buy or sell.
  • Set Price or Trigger Level: For limit orders, specify the desired price. For stop orders, set the trigger level.
  • Review and Submit: Double-check all the order details for accuracy. Once you’re satisfied, submit the AMO order.
  • Confirmation and Execution: You’ll receive a confirmation of your AMO order. It will remain active until the pre-market or regular market session begins. During regular market hours, the order will be executed based on market conditions and available liquidity.

Platforms and Brokers that Offer After-Market Trading

When it comes to after-market trading in India, there are several platforms and brokers that provide this service, allowing investors to trade outside of the regular market hours. Let’s take a look at some popular options:

ICICI Direct

ICICI Direct is a well-known brokerage platform that offers after-market trading. It gives investors the opportunity to place trades during the pre-market and post-market sessions. Consequently, extending their trading capabilities beyond regular market hours.

HDFC Securities

Another notable platform in India is HDFC Securities, which provides after-market trading facilities. With HDFC Securities, investors can engage in trading activities during the extended hours before the market opens and after it closes.

Zerodha

Zerodha, a leading discount brokerage platform, also offers after-market trading through its platform called “Zerodha Kite.” It allows investors to trade in the pre-market and post-market sessions, providing flexibility and convenience.

Upstox

Upstox is an increasingly popular online brokerage platform in India that caters to investors’ needs for after-market trading. It allows users to trade during extended hours outside of regular market hours, enabling them to take advantage of market movements even after the market has closed.

Note: The availability of after-market trading and the specific timings may vary based on the platform and exchange regulations. 

Benefits of an After Market Order (AMO)

After-market orders come with several benefits that can greatly enhance your trading experience. Now that we understand the AMO order meaning, to a certain extent, here are the key advantages:

  • Flexibility to Trade Anytime: With after-market orders, you have the flexibility to place trades outside of regular market hours. It’s perfect for busy individuals who can’t actively trade during the day.
  • React Quickly to News: After-market trading allows you to react swiftly to news and events that may impact stock prices. Stay ahead of the game and take advantage of market-moving information.
  • Manage Risk Effectively: Use after-market orders to set stop orders and limit orders, helping you manage risk and protect your investments. You can control potential losses and lock in profits even when the market is closed.

How to Check After Market Orders on NSE?

If you want to check your after-market orders on the National Stock Exchange (NSE), here’s what you can do:

  • Go to the official NSE website (www.nseindia.com) or use the NSE mobile app.
  • Log in to your trading account using your username and password.
  • Look for the “Order Book” or “Trade Book” section, which might have a different name depending on the platform you’re using.
  • Find the tab or option specifically related to after-market orders or extended trading hours.
  • Once you access the after-market order section, you’ll see details about your orders, such as status, quantity, price, and order type.

Regular Market Orders vs After Market Orders

The following is a comparative analysis of the differences between Regular Market Orders and After Market Orders (AMO):

Aspects of DifferenceRegular Market OrdersAfter-Market Orders
Order TimingsInvestors can place orders between 9:15 AM to 3:30 PM in India during regular trading hours.AMOs can be placed after regular trading hours. They can be entered before 9:15 AM when normal trading resumes the next day. The closing time varies for different market segments.
Types of OrdersInvestors can place both market and limit orders.Only limit orders for buying or selling shares are allowed in after-market orders.
Participant NumbersRegular trading hours see a higher number of participating investors.After-market orders generally involve fewer participants.
LiquidityHigher liquidity is typically observed during regular trading hours, thanks to increased investor participation.Liquidity tends to be lower in after-market orders due to reduced participation.
VolatilityRegular trading orders generally experience lower volatility.After-market orders often involve higher volatility levels.
Price RangePrices are influenced by market dynamics during regular trading.Price ranges for limit orders in after-market sessions are set by the exchange, offering more stability.
Order ModificationsOrders can be modified or canceled during regular trading hours.Modification or cancellation of after-market orders is typically allowed.
Order TypesRegular trading supports various order types, including market, limit, stop loss, and more.After-market orders primarily allow limit orders, with restrictions on certain order types.
Pre-Market TradingPre-market trading is not available in regular trading hours.AMOs provide a pre-market trading option before the regular session starts.

Limitation of an After Market Order

When it comes to after-market orders, it’s important to be aware of their limitations and associated risks. Here are a few key points that you should consider: 

  • Lower Liquidity and Higher Volatility: After-market trading typically has lower trading volumes, which can result in lower liquidity. This may lead to wider bid-ask spreads and increased price volatility, making it harder to execute trades at desired prices.
  • Price Gaps and Slippage: Due to the lower liquidity, after-market orders may be subject to price gaps between the closing and opening prices of a stock. This can result in slippage, where the executed price differs from the expected price, especially for market orders.
  • Potential for Limited Order Execution: Not all stocks may be available for after-market trading. Certain order types, such as stop-loss orders or market orders with special conditions, may have restrictions or limited execution during extended trading hours.

Tips for Successful After-Market Trading

Here are some tips to help you succeed in after-market trading:

  • Conduct Thorough Research and Analysis: Before trading, thoroughly research the stocks or securities you’re interested in. Analyze financial data, company news, and market trends to make well-informed decisions.
  • Set Realistic Expectations and Manage Risk: Understand the risks involved and set realistic expectations for your trades. Implement risk management strategies, such as using stop-loss orders, to protect your investments.
  • Stay Informed with Pre-Market and After-Market News: Monitor news and events that can impact stock prices during pre-market and after-market hours. This information will help you make informed trading decisions.
  • Use Limit Orders: Instead of market orders, consider using limit orders to have more control over the price at which your trades are executed. This reduces the risk of slippage and ensures you buy or sell at your desired price.
  • Start Small and Learn from Experience: If you’re new to after-market trading, begin with smaller trades and gradually increase your position as you gain experience. Learn from your trades, analyze your successes and failures, and refine your strategies over time.

Can We Buy Shares After the Market Closes?

Yes, it is possible to purchase shares after the regular market hours through after-market trading sessions. After-market trading allows investors to trade stocks outside of the standard trading hours. However, it’s important to note that after-market trading hours are limited and can vary depending on the stock exchange and trading platform used. 

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Benefits of Investing in smallcases over AMOs

CriteriasmallcasesAMOs
Variety of OptionsOffers a wide range of themes and strategies to choose from.Limited to a specific set of securities.
CustomizationAllows for portfolio customization to match individual risk profiles and investment goals.Not as customizable, with fewer options for tailoring orders.

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All in all, if you are looking for variety and flexibility, investing in smallcase would be the right choice for you. However, if variety is not an issue for you then you can invest in AMO as well.

To Wrap It Up

After-market orders offer a valuable opportunity for traders to participate in trading activities beyond regular market hours. However, it is important to understand the risks associated with after-market trading, such as lower liquidity and price volatility. 

With careful planning and informed decision-making, after-market orders can be a useful tool to enhance your trading strategies and potentially capitalize on market movements outside of regular trading hours.

FAQs

1. What are the benefits of after market order?

AMO meaning is After Market Orders. After-market orders offer flexibility for trading outside regular market hours. It is ideal for individuals with busy schedules unable to actively trade during the day. This is why the AMO meaning in share market makes a huge difference to some investors.

2. How does AMO work?

Investors submit all AMOs to the exchange, and they execute when the pre-market or after-market session opens, influenced by prevailing market conditions at that moment. The AMO full form in share market is After Market Orders.

3. Can I place order after market close?

Yes. After-hours trading occurs during the period between the market’s closure and when market opens the next day. The AMO order timing is typically outside regular market hours. 

4. What is the time of after market order in India?

After-hour trading sessions can occur before or after the regular trading session. In India, it typically runs from 4:00 PM to 8:55 AM on both the BSE and NSE, with the duration varying based on market conditions. This AMO order time should be maintained.

5. Is Amo order profitable?

If one were aware of the AMO facility, one could place orders before or after market hours, potentially profiting from the stocks held in one’s demat account.

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