Since trading still occurs, the share price can go up or down after hours, depending on what buyers are willing to pay and how much sellers are willing to accept. News on a company's performance or operations is one of the significant facts reflected in after-market stock prices.
Full Answer
What is the NASDAQ after hours?
Why Do Stocks Fluctuate After Hours? During regular stock market trading hours, there are far more people trading many more assets. The smaller number of investors trading outside of …
What are the After Hours of the stock market?
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What is NASDAQ after hours trading?
After-hours trading volume in specific stocks often surges upon the occurrence of market-moving events, such as earnings reports, pre-earnings announcements or M&A activity. Lower liquidity and wider bid-ask spreads are a common feature of after-hours trading. However, investors may consider this a small price to pay for the privilege of exiting a losing position before regular …
What are the NYSE after hours trading?
Oct 28, 2016 · At this point a stock is vulnerable to a sell off if they don't blowout the quarter. Even if a company beats expectations, traders will take …
What is after hours trading?
After hours trading is a key weapon in the sophisticated stock market investor's armory. It makes up one part of the extended hours equation, along with premarket trading.
What time does the stock market close?
The stock market opens at 9.30 a.m. ET, and closes at 4 p.m. ET.
What time does Wells Fargo trade after hours?
The specific rules on after hours trading can differ from brokerage to brokerage. Many brokers let customers trade from 4 p.m. ET to 8 p.m. ET, however there are exceptions. One such example is Wells Fargo, which offers extended hours from 4:05 p.m. ET until 5 p.m. ET.
What is stock futures?
Stock futures are a type of futures contract. Stock index futures are used as an indicator of the future direction of the stock market, so they can give after hours investors important clues on how they should trade. The contracts are based on the future value of an index, such as the Dow Jones Industrial Average or the S&P 500.
What is a stock exchange?
Continue Reading. A stock exchange is a place where markets for shares of ownership in companies are made. To “make a market” means to offer for sale (and offer to purchase) shares of that company.
When did Nvidia report earnings?
Nvidia Corp. (NVDA) earnings results in February 2019 are an excellent example of how after-hours trading works and the dangers that come with it. Nvidia reported quarterly results on February 14. The stock was greeted by a big jump in price, rising to nearly $169 from $154.50 in the 10 minutes following the news.
Is it risky to trade after hours?
Trading in the pre-market and after-hours involves significantly more risk than in the open market. However, more than a third of price-action occurs during extended trading hours. Your broker may not support after-hour trading, however there are ways to trade during irregular market hours – including weekends.
What is liquidity in stocks?
Liquidity is measured by the number of buyers and sellers in relation to the stability of an asset's price. If a stock can easily be bought or sold without moving the price, it is known as "liquid". If a stock move is volatile and sees a large percentage move with a small amount of trades, it is known as "illiquid".
What is Zacks research?
Zacks. Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank.
How do stocks react to earnings announcements?
There are six key factors to consider around how a stock price might behave after an earnings announcement. Traders should understand that: 1 The earnings surprise may already be priced in 2 Updated guidance may point to poor results in the next period 3 Some traders will be taking profits to move onto the next opportunity 4 Large position holders may use the announcement as an opportunity to unwind their position 5 Supply can spike, pushing down prices 6 Technical traders may exacerbate moves
Why do stock prices fall after earnings?
The final factor behind why stock prices may fall even after beating earnings is due to technical traders. Sometimes referred to as “noise traders,” these traders are on the hunt for signals that a stock is behaving in a way that can be exploited in the short term.
What does "buy the rumour, sell the news" mean?
It means exactly what it says – buy stocks based on rumours but once the news headline comes out, make sure you sell. Often, it’s probably even better to sell just before the news comes out.
Buy the rumor, sell the news
In a lot of cases, the price of a good earnings report is already priced into the market. For instance, in the days leading up to Facebook’s Q3 2017 report, many analysts were expecting the company to “crush expectations”.
Lowered guidance
I’ve noticed that a lot of beginner traders will see an earnings beat and automatically presume that everything is good. However, this might not be the case. A company can post an earnings beat while also lowering their earnings guidance. i.e. During the earnings report, they could lower their predictions for future sales or profits.
Sell before other traders sell
Because “profit taking” is so prevalent after a good earnings report, many traders feel as though they need to sell before other traders begin to sell. If I think that other traders are going to lock in their profits and drive the price down, I am more likely to sell myself. Then, if it does drop, I can simply buy it back on the dip.
Hedge funds
The volume after a company reports earnings often provides large hedge funds with the opportunity to exit a large position without knocking down the price of the stock. If the ER is a beat, then there will be plenty of buyers to prop up the price and help them unwind their position.
Panic
As traders take their profits and the stock price declines, a sense of panic begins to set in. This leads to further selling and a steeper decline in the price of the stock. Remember: The market isn’t always rational as traders will often make decisions based on their emotions.
