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Risk #3: Larger quote spreads

Less trading activity could also mean wider spreads between the bid and ask prices. As a result, you may find it more difficult to get your order executed or to get as favorable a price as you could have during regular market hours.

Risk #4: Price volatility

For stocks with limited trading activity, you may find greater price fluctuations than you would have seen during regular trading hours.

Risk #5: Uncertain prices

The prices of some stocks traded during the after-hours session may not reflect the prices of those stocks during regular hours, either at the end of the regular trading session or upon the opening of regular trading the next business day. This means that even if a stock price rises in after-hours trading, it may fall right back down when regular trading opens again and the rest of the market gets to cast its vote on the price of the stock.

NEXT: Risk #6: Bias toward limit orders