Are after-hours moves in stocks more likely to be reversed?

On Yahoo Finance I sometimes see large moves in stocks after hours. Are they more likely to be reversed than moves during normal trading hours? My guess is that for less liquid stocks, and for stocks that do not have news such as earnings, that moves after 4pm tend to be partly reversed by the next open, but I wonder if someone has studied this.

 

If it's overextended. Then yes!

That's how p&d works. It's a common occurrence.

 

NY Fed has a good paper discussing overnight drift. Google it.

 

Usually big moves pre market sell off a bit. Its always best to wait until after the open. Pre market and after hours could be disastrous for a trader. Seeing big moves in a stock pre market or after hours could be intoxicating and you get sucked in whether it’s an earnings release or an upgrade. I’ve lost more money trading after hours than anything. Don’t do it.

 

Only a powerful crystal ball can answer this question.

 

Really depends whether it is drifing towards where it should be trading or away from it, ie a correction or an overbought/sold situation.

 

When I started, I traded volatile stocks before/after market because everything was much slower during those times and easier for me to process. With time I stopped because I found little correlation between trading those times and market trading hours. It's as if they're a world of their own for a few hours.
Also, few trading platforms outside the US allow trading the pre hours (TD Ameritrade Singapore pre hours starts at 7 am, not 4:30 am) so trading movements are also affected by that.

 

Sometimes. So the way I play it is I do a basket of 3-7 of them. Then manage the exits to eek out a profit overall. It worked for many years, but I moved on to greener pastures, pun intended.

 

I don't pay much attention to individual stocks, but looking at my account balances over night and what happens in the next day, its a crap shoot. I think if the markets are up big overnight they are generally more likely than not to open up big and carry through the next day, but quite a lot of times they actually open down and close down (or at least down from what they were up to in the overnights). So if the question is "can I make money by looking at market performances overnight and buying (or selling) at open based on those" I would guess not "alpha" there as peeps on this forum would say - you might, but not more money than doing anything else. Just my antidotal experience from watching.

 

The average portfolio performance is a 23 percent per annum with a Sharpe ratio of 4 here.
https://ieeexplore.ieee.org/document/6611693