3 ms·

Yes. The relatively small trading volume is meaningless. Are there any studies on after-hours movement vs gap return?

• encoderer 11y ago
  I wouldn't call it meaningless but it's absolutely different than a spike during the trading day. Nasdaq shows 315k shares having traded AH, about 17% of what traded during the normal session. I've seen gap-fill studies on big moves in general but never one specific to AH moves.
  • jessriedel 11y ago
    But shouldn't 17% of the trading volume of a massive company like Google be much larger than 100% of the trading volume of most companies, and therefore very accurate? Isn't this plenty of liquidity to make money if the prices was predictably off?
    • encoderer 11y ago
      No, because the AH session uses a separate order book, it has much less liquidity. You can see one 1000-share lot move the stock $5. During the normal session, it would've moved it under $1, possibly just pennies. It's possible much of this move was short sellers who chose to cover AH today. It's also possible that there's a lot of smart money buying AH and we'll see it grind higher tomorrow.
      • jessriedel 11y ago
        Sorry, I still don't understand! I can imagine that AH trading would have a tenth of liquidity in the sense that a 1000-share lot in AH trading moves the stock $5 but in normal hours it's just 50 cents. But if stock A has 100 times the trading volume as stock B, wouldn't AH trading of stock A be as liquid, or more liquid, as normal trading of stock B?