Does price change? I see where many stocks go up just after news when the stock exchanges closes for regular trading. Sometimes it appears that if you get in right after an announcement that you can make more money?
2007-02-15 07:06:17 · 4 answers · asked by Anonymous in Business & Finance ➔ Investing
Smitty you mean wide market spread?
2007-02-15 08:21:39 · update #1
You don't always know which way a stock will run. for instance, after hours one time, GOOG stock went way way down, people were selling it off like crazy and an amateur might short sell the stock to get in on the action.
Well, by the next morning, maybe the news wasn't so bad after all. So the professionals, seeing the low stock price, start to buy it up. The poor amateur thinks he's just cashed in at the bank, now has to buy back his short sold stock and take a huge loss.
But yes, sometimes you can get in right after an announcement. It is possible. The key is knowing when to get out!
Hope that helps!
2007-02-15 07:34:01 · answer #1 · answered by Yada Yada Yada 7 · 1⤊ 0⤋
I watch the after hours markets (don't trade in them) pretty routinely and while the stock movements after hours can often be an indicator of what the stock will do in regular trading the next day, like Yada noted it's not always the case because when a material announcement is disclosed after hours, the analysts need time to properly digest the information and then make recommendations to the institutional money that really move the markets. The problem for the average investor when trading in the after hours market is that it is not very liquid and is often subject to large spreads between the bid and the ask and therefore you can easily get stuck unable to liquidate until the market opens at which time the market may be reacting very diffrently than it was in after hours immediately following the announcement.
2007-02-15 07:53:20 · answer #2 · answered by SmittyJ 3 · 0⤊ 0⤋
Only use limit orders in after hours. The difficulty of which you are speaking comes about due to the bid/ask spread. During after hours trading the spread can become huge. Bid prices may be $.01 and ask price $1000. If you enter a market order these are the prices you will pay/recieve. Always use a limit order to prevent this from happening.
2007-02-15 10:02:49 · answer #3 · answered by Charles C 2 · 0⤊ 0⤋
The same thing as losing your shorts or taking a bath. Which is
what happens to most in day trading. You need a blood relative
on the inside U can trust to let you know when to fold. If not
U are in the sinking boat with everbody else and find out too late !
2007-02-15 07:17:53 · answer #4 · answered by Rusty Jones 4 · 0⤊ 0⤋