November 18, 2007
Posted by splurger
I hear on radio about stocks either booming or sinking in after-hours trading however, I don't understand after-hours trading. I'd would appreciate learning more about it from nobosh.
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November 18, 2007
Posted by chriscahn
( 2 ratings )
After-hours trading can also be known as extended-hours trading (EHT). This extended period allows investors to trade around the traditional exchange hours of 9:30 am - 4 pm EST.
The reason traders trader during extended-hours trading is the potential appeal to take advantage of late-breaking or premarket news (earnings hit or miss etc...).
Typical hours for extended-trading are: 8-9:30am and 4-8pm.
EHT are not executed via exchanges, rather through electronic networks. Only limit orders are allowed, not market price orders. The vast majority of trader due not trade during EHT nor due many advise doing so, such as myself. EHT has low trading volume compared to normal hours, resulting in large bid/ask spreads. This leads to volatility, which is not good for the long-term trader, but potentially good for the short-term trader.
I'm guessing your new to trading. My advice is to stay away from after-hours trading until you have 2+ years of experience.
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