Pre-Market vs. After-Hours Stock Trading

Risks of Trading Pre-Market and After Hours

All investing involves risk, but the Securities and Exchange Commission
(SEC) outlines the following eight risks that are specifically associated with trading in the after-hours and pre-market
sessions:

Risk #1: Inability to see or act upon quotes

Some firms only allow investors to view quotes from the one trading system the firm uses for after-hours trading. Check with
your broker to see which firms’ quotes you will be able to see and off of which quotes you will be able to trade.

Risk #2: Lack of liquidity

During regular trading hours, buyers and sellers of most stocks can trade readily with one another. During after-hours, there
may be less trading volume for some stocks, making it more difficult to execute some of your trades.

NEXT: Risk #3: Larger quote spreads