« Home | Who has the record for being arrested the most tim... » | Where does snot come from? » | Is fish oil really good for you? » | Can you teach an old dog new tricks? » | What are the origins of tarot? » | Why are German Shepherds used as police dogs? » | What is "new car smell"? » | /!\ SPECIAL ANNOUNCEMENT /!\ » | Why can't you take the tag off your mattress? » | What's the origin of the word "picnic"? » 

Friday, April 24, 2009 Bookmark Now! | Email to a friend  

What does after-hours trading mean for the stock market?

I always thought you could only trade between 10 a.m. and 4 p.m., but the practice of buying and selling stocks after official trading hours is a relatively recent phenomenon. 

According to Investing Online, after-hours trading was restricted to big-block trading between major institutional players and high-net-worth individuals. The emergence of electronic communications networks, or ECNs, in the late 1990s opened after-hour trading to individual investors.

After-hours trading is essentially a limited and somewhat riskier version of trading during traditional business hours. As The Investment FAQ explains, most of the after-hour networks operate as crossing markets -- buy and sell orders are processed only if they can be matched exactly.

Why is after-hours trading riskier to the private trader? The U.S. Securities and Exchange Commission points out that bulk trades result in more volatility, or price variations between bids and actual prices. Also, the restricted nature of the trading may mean you don't get the best price for your bid.

Add to: Oneview Add to: Folkd Add to: Yigg Add to: Linkarena Add to: Digg Add to: Del.icio.us Add to: Reddit Add to: Simpy Add to: StumbleUpon Add to: Slashdot Add to: Netscape Add to: Furl Add to: Yahoo Add to: Spurl Add to: Google Add to: Blinklist Add to: Blogmarks Add to: Technorati Add to: Newsvine Add to: Blinkbits Add to: Ma.Gnolia

Share on Facebook Read the whole Blog

Receive post updates by Email