After-hours trading (AHT) is simply trading that happens outside of regular hours on the major exchanges. It starts at 4 p.m. U.S. Eastern Time after the major U.S. stock exchanges close, and it typically runs until 8 p.m., though volume thins out much earlier in the session than during regular market hours (9:30 a.m.–4 p.m.). Trading in the after-hours is conducted through electronic communication networks (ECNs), which allow investors to trade stocks directly with one another without going through a broker or dealer.The appeal of after-hours trading is obvious: Investors can get a jump on what's happening in the markets by trading before everyone else wakes up, and they can react to news events as they happen instead of waiting for the opening bell the next morning.On the other hand, there are also some risks associated with after-hours trading: For one thing, liquidity tends to be lower than during regular market hours, so it may be harder to find someone willing to buy or sell shares at any given price point.For these reasons, most investors should probably avoid participating in after-hours trading unless they have a specific reason for doing so – such as needing to react quickly to news events or wanting to take advantage of pricing discrepancies between different markets.
