Markets · 6 pages · 12 min
How after-hours trading is a thinner room
After the main session fewer quotes compete, so spreads widen and small orders move the price more.
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From the opening
After-hours trading is the session outside the main market hours, when fewer firms and fewer investors are posting quotes. The room is thinner because less size rests in the book and a modest order can move the price more than it would when the main session is crowded. The opening covers fewer quotes stand after hours, spreads widen as the crowd leaves, and small size moves the price.
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Inside
- Fewer quotes stand after hours
- Spreads widen as the crowd leaves
- Small size moves the price
- News meets a shallow book
- Where the idea stops applying
- A distinction worth keeping
Sources
- Extended-hours equity trading
- Liquidity differences outside the regular session