How to Trade the After-Market Movers

Learn the fundamentals of trading stocks after regular hours

Regular market activity ends at 4 PM EST. However, stocks are still bought and sold after the closing bell. Here are the pros & cons of after-market movers.

After normal market hours, volumes deflate, and fewer players engage in the exchange. This style of stock trading is associated with rapid moves, high stakes and high profits. Even with the most reliable trading broker, it is not possible to assess the full scope of the risk. Here is a basic guide to help you navigate the realm of after-market movers.

After Hours Trading Definition

As the term suggests, this kind of trading occurs after the official hours for activity on the US stock market. NASDAQ and the New York Stock Exchange (NYSE) are most active between 9:30 a.m. EST and 4 p.m. EST. This is because financial institutions, such as banks, are open. The prices quoted in the media (for opening and closing) also refer to 9:30 a.m. EST and 4 p.m. EST, respectively.

However, trading does not cease once the clock strikes 4 in the afternoon. In fact, smaller volumes still circulate outside the period. Here, trading is classified as either ‘pre-market’ or ‘after hours’ (also ‘aftermarket’).

NASDAQ securities are traded from 4 AM, while for NYSE the earliest is 7 AM. All trades executed before 9:30 AM EST qualify as pre-market. In the same vein, all trades closed after 4 PM EST (until 8 PM EST) fall into the aftermarket category.

The Origins of Aftermarket

Naturally, when the closing bell rings at 4 pm, trading does not cease immediately. Some traders are still getting out of their positions or opening new ones. This inertia explains the subsequent hours of trading activity. Therefore, movements are caused by the same factors. Participants buy and sell stocks based on the general sentiment. The only difference is the time frame.

Another crucial factor is media reports. Corporate news that concern earnings may be posted after the closing bell. However, they are powerful enough to sway prices significantly. Once the news is made public, institutions and retail traders will decide on their strategy.

Imagine yourself in this situation. The market has officially closed, but crucial news has just been broken. Most of your peers will not be able to react until the next day. Here, the sooner you act, the bigger the opportunities.

As a consequence, the market may experience dramatic changes when most of its participants are dormant. Stock prices may even skyrocket or nosedive depending on the nature of the news. The general volatility may also attract day traders willing to change their regular behaviour to rake in higher profits.

Which Stocks May be Traded?

Most often, these movers are stocks with immense daily volumes. The lower the volume — the lower the interest and probability of after-market activity. This also means the stocks of small lesser-known companies are likely to be excluded.

Therefore, not all shares will circulate after 4 PM EST. The activity concerns assets that have enough buyers and sellers willing to conclude transactions. Moreover, they both have to accept the price.

Where to Find the Movers

Here, you have several possible sources. First, pay attention to announcements concerning earnings release. Many corporations make these in advance. If this is scheduled for after 4 PM EST, you have a chance to capitalize on after-market moves. All earnings may be found on Yahoo! Finance.

Other sources of information include NASDAQ After Hours Most Active list. Check MarketWatch After Hours Screener as well. The trading software you use may also give access to relevant active listings. Contact your broker to see if this kind of data is accessible.

Pros and Cons of After Hours

Weaker competition is the biggest benefit of trading after normal hours. The fewer traders there are, the more favourable the prices. As soon as the marketplace gains more liquidity, the gains are less impressive.

On the other hand, fewer competitors means lower volumes. Besides, price movements are often erratic. Hence, it is easier to make a mistake that brings losses. The final drawback is that dramatic moves may be difficult to get in.

Tips for Trading

If you intend to harness after-market movers, here are a few suggestions. There are a few differences from common trading tricks. Two popular approaches are news-related and trend following.

Basic guidelines are identical to rules for normal hours. However, you should remember about the following distinctions and accommodate for them:

  • higher spreads,
  • smaller volume, and
  • bigger price shifts.

Here, stop loss tools are useless, and the stakes are high. To hedge the risk, stick to modest position sizes in comparison to what you would normally trade.

In conclusion, stocks of the largest companies remain in circulation after the closing bell. After-hours exchange brings higher profits or higher loss depending on your strategy. Therefore, the opportunities are impressive, but they require common sense and preparation.

*** SPECIAL ALERT — July 11, 2020 — TWO of this Year’s Motley Fool Stock Picks Have Already Tripled and Two have Doubled! ****

We have been tracking ALL of the Motley Fool stock picks since January 2016. That’s 4+ years, 54 months and 108 stock picks. As of Friday, July 10th 2 of their 12 2020 stocks picks have already tripled (TSLA, SHOP). In addition, 4 of their 2019, 8 of their 2018, 7 of their 2016 and 10 of their 2016 picks have also doubled. Best of all, over these 54 months, the average stock pick is up 111%. That beats the SP500 by an average of 87%. And that’s even accounting for all of this COVID mess that has wreaked havoc on some stocks but presented opportunity for other stocks. THAT is how the Fool does so well!

  • Shopify (SHOP) – April 2, 2020 pick and it is already up 163%
  • Zoom Video (ZM) – March 19, 2020 pick and it is already up 107%
  • DexCom (DXCM) picked Feb 20, 2020 right before the market crashed and it is still up 26%
  • Tesla (TSLA) picked January 2, 2020 before the crash and it is up 123% compared to the SP500 -7% so it is ahead of the market by 130%
  • HubSpot (HUBS) picked December 5, 2019 and it is up 46%
  • Netflix (NFLX) picked November 21, 2019 and it is up 42%
  • Trade Desk (TTD) picked November 11, 2019 and up 111%
  • Zoom Video originally picked Oct 3 and it is up 234%
  • SolarEdge (SEDG) picked September 19, 2019 and it is up 44%

Now, no one can guarantee that their next picks will be as strong, but our 4.5 years of experience has been super-profitable. They also claim that since inception, their average pick is up 424% and now we believe them. You sure don’t want to risk missing out. Many analysts are saying that we have passed the bottom of this COVID crisis and stocks will recover quickly. So make sure you have the best stocks in your portfolio.

Normally the Fool service is priced at $199 per year but they are currently offering it for just $99/year if you click this link

CLICK HERE to get The Motley Fool’s Stock Picks for just $99 per Year! 



Robinhood was the first brokerage site to NOT charge commissions when they opened in 2013. They just past 10,000,000 accounts and to celebrate they are offering up to $1,000 in free stock when you open a new account.

Here’s the details: You must click on a special promo link to open your new Robinhood account. Then when you fund your account with at least $10, you will receive one stock valued between $5 and $500. Then, you will get a link to share with your friends. Every time one of your friends opens an account, you will receive another free stock valued between $5 and $500. Click here to learn more about this Special Robinhood offer.

Claim your free stock NOW

(before it’s too late)

Leave a Reply

Your email address will not be published. Required fields are marked *