What is After-Hours Trading?
After-hours trading occurs outside regular market hours (9:30 AM - 4:00 PM ET), typically from 4:00 PM to 8:00 PM ET and 4:00 AM to 9:30 AM ET, with lower liquidity and wider spreads.
After-Hours Trading Explained
After-hours sessions are where many earnings reactions and news-driven moves happen. While they offer opportunity, they carry significant risks: much lower liquidity means wider spreads and more slippage, and not all order types are available. Many professional traders avoid after-hours trading altogether or use very small position sizes.
Real-World Example
AAPL reports blowout earnings at 4:05 PM. In after-hours trading, the stock jumps from $180 to $192 in minutes. However, the spread widens to $0.50 (vs $0.01 during regular hours), and a market order might fill at $192.50. Regular session traders wait for 9:30 AM the next day for better pricing.
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