trading stocks during after hours??

[fearme]

who does this?? pro traders or newbies? when the after hours ends is that where the stock will open at the next day?

[Korch]

there's less liquidity after hours, so there's typically not a lot of volume traded and bid-ask spreads are very large.

[xx44]

-Fear

Most brokerage firms now give you the ability to trade until 8 PM. When the afterhours trading ends, the stock will usually open the next day close to that price. However, if news breaks premarket in the morning, the market makers will start adjusting their price (either up or down) to reflect the news before it actually opens.

-blueman

Most brokerage firms offer direct access trading which give the client the ability to bypass a broker and actually buy/sell directly with a market maker or specialist.

Stocks are usually halted (no trading) pending a major announcement afterhours, then when they reopen its a mad scramble as the Mkt makers start adjusting their prices way up or way down.

A problem occurs, for example, when "ABC" company releases a headline stating their earnings were up $.34 beating the street estimates by $.20. Initially people look it as good news, and b/c after hours trading is very thin, the stcok moves up $3. Then they realease a following story stating they wont be able to reach next year's target estimates, stock then tanks.

Bottom line, very easy to get whipsawed afer hours, and most retail traders find it a losing proposition.

[pig4bill]

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who does this?? pro traders or newbies?

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Yup. Anyone with the money and time and a broker that allows it. For example, Etrade lets you trade in extended hours.

[ QUOTE ]
when the after hours ends is that where the stock will open at the next day?

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Not really. It's established more by the pre-market trading that starts an hour and a half(I think) before the market opens.

[spino1i]

Stocks get high volume by either being heavily-traded stocks in general or because some news comes out and its temporarly trading very heavily.

The problem with after-hours trading is unless the stock has high volume you just arent going to be doing much trading. The gap between the bids of buyers and sellers is too big, and thus no one wants to do any trades since neither party can agree on a price. But if theres heavy volume, the number of buyers and sellers increases and then with more prices being put forth people are more likely to compromise and trades occur.