Schwab Will Jump Into After-Hours Trading Fray

Charles Schwab Corp. on Monday became the latest--and biggest--online brokerage firm to announce plans for after-hours stock trading, saying that beginning next month it will let customers trade most Nasdaq and some New York Stock Exchange stocks after regular hours.

Investors will be able to trade over Schwab’s Web site or by phone between 1:30 p.m. Pacific time, 30 minutes after the close of the traditional markets, and 4 p.m. Standard commission rates will apply.

After-hours trading has started slowly, with volume so far that’s a fraction of what it is during the day. Nevertheless, online brokers are rushing to offer the service to stay competitive.

In a survey done about four months ago, about 40% of Schwab customers said they had a “very strong” interest in after-hours trading, said Susanne Lyons, Schwab’s president of retail client services.

“We were surprised by how high the numbers were,” she said.

Extended-hours trading may eventually prove popular in California, where the stock market now closes at lunchtime. About one-third of Schwab’s 2.8 million Internet customers live in California.

Extended trading can be risky for individuals, where light volume can cause sharp swings in stock prices. Schwab will notify customers about the risks on its Web site and in mailings included with monthly account statements.