GLOSSARY // Day Trading
After-Hours Trading
After-hours trading is the 4:00 p.m. to 8:00 p.m. ET electronic session that follows the regular close. It exists mostly to price the news that companies deliberately release after 4:00 — the bulk of earnings reports hit between 4:01 and 4:30 p.m.
The mechanics mirror premarket: thin books, wide spreads, limit orders strongly preferred, and no LULD volatility halts protecting you from a bad fill. A stock can drop 20% after hours on a headline and recover half of it by the next open, so after-hours prints are a first draft, not a verdict.
A chipmaker closes at $120.00 and reports at 4:05 p.m. The stock trades down to $102 within ten minutes on light volume, then stabilizes near $109 by 6:00 p.m. as the call clarifies guidance. It opens the next day at $111.35 — the initial 15% after-hours drop overstated the damage.
Related terms
Educational only — not financial advice. Definitions simplified for clarity; markets are messier than definitions.