What is After Market Order (AMO) & How it Works?
The stock market opens at 9.15 am on business days and is operational till 3.30 pm. Many people invest in the stock market to make some passive income apart from their regular jobs. However, many investors need to trade during operational hours. But you are no longer required to miss an opportunity because you have the option of AMO or After Market Order.
An After Market Order is the solution for those investors who cannot place an order during regular operational hours. But, investors can only place the orders during non-operational hours, but they can’t be executed. Orders can only be executed during market hours.
Let us delve deeper to know What is After market order (AMO) & How it Works?
What is After Market Order?
It is called After Market Order when an order is placed and not executed after regular market hours. It is referred to as advanced order that can be placed anytime after the regular market hours and executed during the normal market hours (i.e., 9.15 am to 3.30 pm.)
After Market Order in stock trading offer higher flexibility to individuals unable to trade during the standard market hours. AMO orders can be placed in the market segments after the stock market closes.
Please remember AMOs is a type of market order; hence, you cannot place a bracket, stop loss or cover order. But you are allowed to place a limited order.
What are the Timings of After Market Orders?
As mentioned, the normal stock trading hours start at 9.15 am and stop at 3.30 pm. Any order placed after 3.30 pm is referred to as AMO. But, there are specific timeframes for placing the After Market Orders, which vary depending upon different segments.
- NSE Equity Market – 3.45 pm to 8.57 am
- Equity Futures and Options – 3.45 pm to 910 am
- BSE Equity Market – 3.45 pm and 8.59 am
- Commodity Market – Anytime after the regular market hours till the next market hours
- Currency Market – 3.45 pm to 8.59 am
How Does After Market Order Work?
After Market Order or AMO can only be placed when the market hours are over, the orders placed by the investors will be sent to the stock exchange the next day before the regular operational hours start.
Investors must have a broker’s account online to place an After Market Order, and when placing an order, investors have to tab on the “AMO” option. Timing for placing orders varies from broker to broker.
Investors have to ensure that their account has sufficient balance in their trading account to place After Market Orders successfully. Investors must ensure that the stock is available in their trading account to place a sell order. Any shortfall of securities or funds in the trading account may lead to broker order rejection before the order is sent to the exchange.
When placing an After Market Order, investors must consider the closing price. But they get the flexibility to choose any price, which can be 5% less or more than the closing price of the order.
What are the Benefits of After Market Orders?
- After Market Order allows individuals to invest or trade in off hours when the market is closed.
- Investors can modify and cancel the After Market Orders, protecting them from negative incidents that may impact the stock market.
- After Market Orders are available for all market segments, including Forex, Equity, Commodity and F&O
- After Market Orders can be placed on weekends when the stock market is closed
- After Market Orders can be placed for diverse trading options, including Margin Intraday Square Off, Cash & Carry, Normal Order, and more
There are many benefits that one can enjoy with the After Market Order. After the advent of AMOs, investing and trading in stocks has become a hassle-free process for all, especially those unable to trade or invest during official market hours.
So, if you are interested in stocks, but can’t trade or invest during the official market hours, use the option, After Market Order.