After-Hours Trading

Talk about something here for the next few minutes that some of you maybe have participated in and some of you maybe have never even heard about, after-hours trading. What is it? Well simply put, it’s almost in the title, right? It’s trading that occurs outside of normal market hours. Well what are normal market hours? Basically, 9:30am to 4pm Eastern Time. That’s what they consider regular trading hours. Well there’s two after-hour sessions out there that you can actually buy and sell stocks in. One is what they call pre-market. Pre-market takes place during 4am and then market open, 9:30 Eastern Time. And then they have after-hours, so basically after the market closes, right? So 4pm until 8pm. So traditionally this was kind of reserved for your big institutional investors or oh, mutual funds institutions that were trying to make adjustments and stuff. But sense technology has advanced and other things are created, anyone really can do this. Now it’s important to know though, that there’s additional risk that kind of come along with this. Typically, it’s a lower volume. There’s less people participating, meaning there’s not as many buyers and sellers out there. So the volume of transactions is much lower. So how does that make an impact? Well, typically when you don’t have as many people trying to buy something or sell something, the prices can be more volatile often. So you got to be aware of that, if you are participating in us. And then also, you know it can be beneficial. Let’s say somebody has you know a company’s released earnings and they think it’s going to go one way or the other or you’re trying to get out of a position and you don’t want to wait until the next day. Well it gives you the potential opportunity to go ahead and change or liquidate or buy investments during that time. Once again, important to note though, there’s going to be some greater volatility during that time. And so oftentimes, you know when you see like futures or something pops up if you’re watching some of the financial shows, you’ll see some of these pre-market numbers and stuff like that. And sometimes it’s led to believe that that’s an expectation of where the market is going to go. It might be, but not always. There’s many days that you see after-hours trading, pre-market trading, stuff like that maybe trading lower and then once the market opens, then it pops up or vice versa, right? So it’s something out there that is used. Some people don’t know that it’s there. But it’s one of those things once again, to keep a cautious eye to and just an interesting thing that we hope you find helpful on your education with the financial markets and such like that. For you and your retirement plan, we just believe it’s critical to have a detailed, customized plan for you and then hopefully when you have that and the strategies in place, you don’t have to worry about doing after-hours trading.