Glossary
After-Hours Trading
Trading outside the regular session, in the extended windows most US brokers open before and after normal market hours.
US exchanges run from 9:30am to 4:00pm Eastern. Most brokers also let orders through in an earlier window before the open and a later one after the close, and those sessions are where a stock reacts to news that lands at 4:30pm, an earnings release being the usual case.
Far fewer people are trading in those windows, and that changes how prices behave. With fewer participants present, the gap between what buyers offer and what sellers ask widens, orders fill further from the last printed price, and one modest order can move the quote more than it would at midday.
The prices quoted after hours are real trades, but they are thin, and where a stock opens the next morning frequently differs from where it was quoted overnight. Brokers also restrict what can be placed in these sessions, commonly accepting limit orders only.
Learn this properly
Lesson 3: How Buying a Stock Actually WorksBrokerage accounts, what happens in the seconds after you press the button, and order types explained without the jargon.
Related terms
- Market HoursThe regular session when US exchanges are open: 9:30am to 4:00pm Eastern, Monday to Friday, minus market holidays.
- Bid-Ask SpreadThe gap between the highest price a buyer is offering and the lowest a seller will accept, usually quoted in cents per share.
- Limit OrderAn instruction to trade only at a stated price or better, which may go unfilled if that price is never reached.
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