Pre-Market / Afterhours

J

jr07

Hi

If supposedly the markets are "closed" how come there is so much trading that influences prices during these periods? Or are prices reflecting the impact of the backlog or orders placed outside of market hours?

I have a friend who tells me he used to trade only in these times, but I can't see how. At least with my 2 brokers, an order placed when the market is closed just sits there waiting for the following open.

Thank
J
 
It's the stock exchanges that are closed, not the markets so what you're seeing is trading on ECNs (electronic communication networks) which facilitate trading outside of stock exchanges.

Do not trade in after hours (AH) unless you clearly understand what you're doing. Spreads can be very wide and low liquidity can whipsaw price around quickly. After hours is often referred to as Amateur Hour.
 
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