After-hours trading occurs on major U.S. stock exchanges (like the NYSE) between 4 p.m. and 8 p.m. Eastern Time, Monday-Friday.
During this time, investors place bids through their brokerages, which relay the details through electronic communication networks (ECNs). If an ECN can match buyers and sellers near the same price points, the trade goes through.
Some investors use after-hours trading to capitalize on late news. However, it’s riskier due to lower trading volumes, stunted liquidity and higher volatility.
