after-hours trading

After Hours Trading

The practice of trading a security after an exchange has closed. After-hours trading occurs over-the-counter, but both listed and unlisted securities may be traded. After-hours trading is often less liquid than regular trading because participation by market makers is voluntary, whereas market makers are required to serve as a counterparty for a security during trading hours. The price of a security in after-hours trading may influence is price on the next trading day. The practice is less commonly called extended-hours trading.

after-hours trading

The trading of securities after the exchanges are closed. After-hours trading often refers to trading a listed security in the over-the-counter market after the exchanges have been closed for the day. This fairly common practice is not illegal. Also called extended-hours trading.
Case Study Research indicates individual investors trading outside normal market hours (9:30 a.m. to 4:00 p.m. EST) can expect to incur increased transaction expenses. The higher expense of after-hours trading stems from reduced liquidity and the resulting larger spreads between bid and ask quotations. For example, a stock that typically trades with a spread of 5¢ to 10¢ during regular market hours might have a spread of 25¢ to 50¢, or even more, in after-hours trading. Actively traded stocks during regular hours often become relatively illiquid in after-hours trading, when few orders are posted and even small transactions can result in large price fluctuations. The potential volatility and lack of liquidity in after-hours trading are likely to result in individual investors paying too high a price when buying stock and receiving too low a price when selling stock.
References in periodicals archive ?
Its shares slumped in after-hours trading on Wednesday night and dropped further in the subsequent trading session, even though its revenues more than doubled to a bigger-than-expected $243m in the October to December quarter.
Facebook soared 12 percent in after-hours trading Wednesday after its earnings and revenue surpassed expectations.
NEW products helped post record revenue figures for Apple during the last quarter - though company shares slumped dramatically in after-hours trading.
Talisman Energy shares surged in after-hours trading after activist investor Carl Icahn said he had purchased about 61 million shares of the underperforming Canadian oil producer and may seek a seat on the company's board.
shares of which jumped nearly 7 percent in after-hours trading, brokers said.
Google's fourth-quarter revenue climbed 25% from a year earlier but was less than analysts had expected, pulling its stock price down 9% in after-hours trading.
RIM shares fell more than 6% in after-hours trading.
Turnover during after-hours trading in major derivatives exchanges ranges from 15 per cent to 37 per cent of the turnover during their regular trading hours.
The stock fell 4% in after-hours trading as net profit for the three months to June 30 came in at pounds 1.
NEW YORK: Intel shares soared in after-hours trading Tuesday after the world s biggest computer chipmaker delivered earnings that beat estimates and an upbeat forecast for the remainder of the year.
The after-hours trading showed a modest uptick in prices as bullish sentiment again began to reassert itself.
The airline's shares had soared in after-hours trading following news that the government was likely to approve the crucial loan, reported Reuters.