How markets work
After-hours trading
Also called Extended-hours trading
Trading that happens outside an exchange’s regular session, in a much thinner market.
How it works
Extended sessions exist so that participants can react to news released outside market hours, which is when most companies report results.
Liquidity is a fraction of normal, spreads are wide, and many order types are unavailable — most venues accept limit orders only, for good reason.
Where it misleads people
A stock "down 8% after hours" may have traded a few thousand shares. The headline percentage is real and the sample behind it often is not.
Related terms
- Market hoursThe window in which an exchange’s main continuous trading session runs.
- Earnings announcementA company’s scheduled publication of its financial results for a quarter or year.
- GapA jump between one session’s close and the next session’s open, with no trading in between.
- Limit orderAn instruction to trade only at a specified price or better, accepting that it may never fill.
More in How markets work
All 33 How markets work terms · The full glossary, 433 terms
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