Definition of After-Hours Trading

After-hours trading is the timeframe after the market closes when a financial specialist can purchase and offer securities outside of traditional exchange hours.

Pre-market trading, conversely, happens in the hours prior to the time that the market formally opens. Together, after-hours and pre-market trading duration is known as extended-hours trading.

Points to remember

• After-hours trading happens right after the market gets closed.
• It gives you permission to react to the various news events before other investors can.
• The risks taken in after-hours trading are substantial and are also worth cautious consideration.