After hours stock trades
May 24, 2017 2:43 PM Subscribe
What's going on with after hours trades that are way off the going rate? I understand a few shares going through, but explain this Amazon trade for example. About $2.7 million changes hands after hours today at about $130 per share below the closing price.
Remember the value of a stock is literally what it will trade for.
During normal market hours there's always buyers and sellers waiting, which reduces volatility (someone else has a bid/ask at a nearby price, even if I choose not to sell/buy at that particular time.) During off-market hours the size of the market is much less and so buyers that are there can command a premium.
You might argue that that means that a stock is worth less outside market hours, and that's crazy. But it's true! People who trade outside market hours generally don't have a choice, and as a result they'll take losses for it.
The moral of the story? Wait until morning.
posted by doomsey at 8:27 PM on May 24, 2017
During normal market hours there's always buyers and sellers waiting, which reduces volatility (someone else has a bid/ask at a nearby price, even if I choose not to sell/buy at that particular time.) During off-market hours the size of the market is much less and so buyers that are there can command a premium.
You might argue that that means that a stock is worth less outside market hours, and that's crazy. But it's true! People who trade outside market hours generally don't have a choice, and as a result they'll take losses for it.
The moral of the story? Wait until morning.
posted by doomsey at 8:27 PM on May 24, 2017
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$980.35 was the closing price for Amazon today.
posted by weapons-grade pandemonium at 2:47 PM on May 24, 2017