Trading taking place after regular trading hours is known as after-hours trading (AHT). Today, many traders have access to electronic communication networks (ECNs) where they can carry out after-hour trading on the after-hours market.

When market moving information becomes public, we can usually see an increase in after-hours trading in relevant securities, since traders do not want to wait until the regular market opens to act on the new information.

The after-hour market will normally have a much lower liquidity than regular markets and you can expect bid-ask spreads to be wider.

The first two hours after market close is usually when a majority of the after-hour trading is carried out.

In the late 1990s, several major U.S. stock market exchanges introduced extended and after-market trading hours. NYSE and Nasdaq are two examples of exchanges that allow institutions to place order interest and trading activity outside of regular trading hours.

This article was last updated on: March 23, 2016