Ask Matt: Trading stock options in after hours

• Stock options only trade during regular stock trading hours
• Investor demand for option trading before and after market hours is slim
• There are plans to open some options securities up to after-hours trading in the future

USA TODAY markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com.

Q: Why don't stock options trade before and after regular stock market hours, as do most stocks?

A: Stock options give their owners the right to buy or sell stocks or other investments at a prearranged price in the future. But in most cases, options can only be bought or sold during regular trading hours.

A vast majority of the options on U.S. stocks trade between 9:30 a.m. ET and 4 p.m ET.

Most stocks, though, can be traded before or after those hours. It's puzzling for some investors that there's no similar premarket and after-hours trading available for many stock options.

The reason is simple: Stock options don't trade in extended hours because there's not enough interest, says Jim Bittman of the CBOE Options Institute, the educational arm of the large options exchange.

Options exchanges have looked into extending trading hours, but found there's not enough trading volume to justify the cost, he says.

There are some exceptions. Options that are based on indexes, such as the Standard & Poor's 500 and Dow Jones industrial average trade until 4:15 ET, he says.

And options on futures tied to the CBOE volatility index, or VIX, trade from 8 a.m. ET to 4:15 p.m. ET. The VIX is an index that rises and falls along with investors' anxiety about markets.

The CBOE says that sometime next year it plans to keep trading in the VIX open 24 hours a day.