<p id="isPasted">After-hours trading, also known as extended-hours trading, is the buying and selling of stocks and other securities outside the standard trading hours of a stock exchange. This allows investors to react to major announcements, such as earnings reports or global news events, that occur after the market closes. </p><p><strong>How After-Hours Trading Works</strong></p><p>In the U.S., after-hours trading typically runs from 4:00 p.m. to 8:00 p.m. ET, and pre-market trading runs before the market opens, usually from 4:00 a.m. to 9:30 a.m. ET. In India, the process usually involves placing an After Market Order (AMO) between approximately 4:00 p.m. and 8:55 a.m. the next day, which is then queued for execution at the market opening on the next trading day. </p><p>Trades during these periods are generally executed through Electronic Communication Networks (ECNs), which match buy and sell orders automatically. </p><p><strong>Key Characteristics and Risks</strong></p><p>After-hours trading differs significantly from regular trading sessions due to limited participation. </p><p><strong> Risk Explanation</strong></p><table data-animation-nesting="" data-complete="true" data-sae="" style="border: none; border-collapse: collapse; table-layout: auto; width: 652px; color: rgb(230, 232, 240); font-family: "Google Sans", Arial, sans-serif; font-size: 14px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(16, 18, 24); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;" id="isPasted"><tbody data-complete="true"><tr data-complete="true" data-sfc-cp=""><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: 0.8px solid rgb(45, 47, 53); min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: "Google Sans", Arial, sans-serif; font-size: 14px; line-height: 22px; padding: 12px 16px 12px 0px;">Low Liquidity</td><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: 0.8px solid rgb(45, 47, 53); min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: "Google Sans", Arial, sans-serif; font-size: 14px; line-height: 22px; padding: 12px 0px;">Fewer participants means it can be harder to find a buyer or seller, making it difficult to execute trades quickly or at desired prices.</td></tr><tr data-complete="true" data-sfc-cp=""><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: 0.8px solid rgb(45, 47, 53); min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: "Google Sans", Arial, sans-serif; font-size: 14px; line-height: 22px; padding: 12px 16px 12px 0px;">High Volatility</td><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: 0.8px solid rgb(45, 47, 53); min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: "Google Sans", Arial, sans-serif; font-size: 14px; line-height: 22px; padding: 12px 0px;">Due to lower trading volume, a single large order can cause significant price swings.</td></tr><tr data-complete="true" data-sfc-cp=""><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: 0.8px solid rgb(45, 47, 53); min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: "Google Sans", Arial, sans-serif; font-size: 14px; line-height: 22px; padding: 12px 16px 12px 0px;">Wider Bid-Ask Spreads</td><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: 0.8px solid rgb(45, 47, 53); min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: "Google Sans", Arial, sans-serif; font-size: 14px; line-height: 22px; padding: 12px 0px;">The difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask) is often wider, leading to less favorable pricing.</td></tr><tr data-complete="true" data-sfc-cp=""><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: 0.8px solid rgb(45, 47, 53); min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: "Google Sans", Arial, sans-serif; font-size: 14px; line-height: 22px; padding: 12px 16px 12px 0px;">Uncertain Execution</td><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: 0.8px solid rgb(45, 47, 53); min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: "Google Sans", Arial, sans-serif; font-size: 14px; line-height: 22px; padding: 12px 0px;">Orders, often restricted to limit orders, may be only partially filled or not filled at all. The final execution price can differ from the price observed in the after-hours session.</td></tr><tr data-complete="true" data-sfc-cp=""><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: none; min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: "Google Sans", Arial, sans-serif; font-size: 14px; line-height: 22px; padding: 12px 16px 12px 0px;">Price Gaps</td><td colspan="undefined" data-complete="true" data-sfc-cp="" style="border-bottom: none; min-width: 4em; vertical-align: top; color: rgb(230, 232, 240); font-family: "Google Sans", Arial, sans-serif; font-size: 14px; line-height: 22px; padding: 12px 0px;">Significant news released after hours can cause a stock to open at a substantially different price the next morning, leading to potential unexpected losses or gains.</td></tr></tbody></table><p><br></p><p>For most retail investors, after-hours trading is best suited for experienced traders who can navigate its inherent risks and use limit orders to control their execution price. <br></p>
<p id="isPasted">After-hours trading, also known as extended-hours trading, is the buying and selling of stocks and other securities outside the standard trading hours of a stock exchange. This allows investors to react to major announcements, such as earnings reports or global news events, that occur after the market closes. </p><p><strong>How After-Hours Trading Works</strong></p><p>In the U.S., after-hours trading typically runs from 4:00 p.m. to 8:00 p.m. ET, and pre-market trading runs before the market opens, usually from 4:00 a.m. to 9:30 a.m. ET. In India, the process usually involves placing an After Market Order (AMO) between approximately 4:00 p.m. and 8:55 …</p>
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