A method for individual investors to use PTS trading to anticipate next-day gains by taking advantage of the gap after an earnings announcement was introduced. By using night trading, which remains available after the TSE afternoon session ends, investors may be able to place buy orders immediately after a strong earnings announcement.
Earnings announcements are often made after the stock market has finished its morning session, but under normal trading arrangements investors must wait until the following morning’s opening auction. This can result in a rush of buying and increase the risk of being stuck with a high purchase price. A method available to individual investors for avoiding this risk of missing out has been introduced.
One solution is to use a PTS, or proprietary trading system. Because trades can be executed through a PTS after the TSE afternoon session has ended, investors may be able to execute trades immediately after a strong earnings announcement in anticipation of a rise in the share price the following day. Using PTS trading offered by an online broker makes real-time trading possible after 15:30.
Other advantages cited for PTS trading include the ability to place orders in smaller price increments and the possibility of lower fees. This may create more opportunities to execute trades at a better price than on the TSE while keeping costs down.