After-hours trading refers to stock trading outside the traditional trading hours of the major exchanges, such as the New York Stock Exchange and the Nasdaq Stock Market. The traditional or regular trading hours have been for some time from 9:30 a.m. to 4:00 p.m. Eastern Time.
Trading outside these regular hours is not a new phenomenon. But it has generally been limited to high net-worth investors and institutional investors, such as mutual funds. The emergence of private trading systems, known as Electronic Communications Networks, or ECNs, has allowed individual investors to participate in after-hours trading.
While after-hours trading promises greater opportunities and convenience for individual investors, it also involves significant risk. The after-hours market can be much more volatile and far less liquid. Before considering an after-hours trade, be sure to educate yourself about the risks.
Read about the risks of After-Hours Trading.
