After Hours Volatility Question

Discussion in 'Trading' started by wiesman02, Jun 14, 2007.

  1. Why is after hours trading so volatile ?

    I really don't understand it. For instance, I'm looking at CVTX's AH quotes.

    For instance: The stock closes at 10.76. A few trades later, the damn thing is down to 10.38 AH.

    Why such a large drop ? One trade went from 10.76 to 10.38. Can someone possibly explain this ?
  2. piezoe


    when volume is low, it does not take a very big order to have a relatively large effect on price, because of order imbalance. Volume tends to be low afterhours.
  3. There might have been a news item that motivated that movement.
  4. There are some -fool- people that sometimes place market orders in after-hours; and get screwed prices as a result. This may cause large price swings.

    The lesson: ALWAYS use limit orders after-hours.