UK Accounting Glossary
After-hours trading is stock trading which takes place after the traditional 4:00 p.m. close of the New York markets. While after-hours trading has been available to institutional investors for quite some time, after-hours trading is now permissible for all traders. After-hours trading is conducted via an Electronic Communication Network (an ECN), which electronically matches buyers and sellers rather than by open call, which is still the primary method of order fulfilment during normal trading hours. While the after-hours trading volume is generally very light, there are advantages to after-hours trading, especially for institutional investors. By using the ECN for after-hours trading, traders can avoid the spreads charged by market makers, plus with after-hours trading there is greater anonymity, an important consideration for many large traders.
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This glossary post was last updated: 4th February 2020.