How to Trade After Hours

Electronic trading has increased the traffic of afterhours trading due to the growing community of online brokerage accounts. Investors should educate themselves before executing such trades because of somewhat opaque trading practices associated with non-market hours. Limit and stop orders are staples of after-hours traders.

After hours trading allows more passive investors, such as non-day traders, to execute orders if they don't have time during market hours. Trading strategies can entirely revolve around entering orders, using limits and stops, after hours or pre-market for execution during the forthcoming trading session. Like pre-market trading, after hours traders are exposed to reduced liquidity, wider spreads, and increased volatility.