After-Hours Trading

• Trades executed outside of normal market hours are performed by electronic communication networks or ECNs. These enable traders to find trading partners even if the market is closed.
  
  

Low Volume

• Because the markets are closed, there are fewer people paying attention, so it is much tougher to find trading partners. You could place an order to buy X shares of Y stock for $100, but if the electronic communication network can't find anyone willing to sell, the trade will not happen.
  
  

Costs

• It usually doesn't cost anything extra to trade after hours, but this will depend on your brokerage. Most brokerages charge more for limit orders (orders where you set a price above or below which you will not buy or sell) and it would be foolish to try to trade after hours without using a limit order because otherwise you pay whatever price you get, and could end up overpaying for a stock.
  
  

More Volatile

• Because there are fewer traders, the gap between the bid price and the ask price on stocks will be wider than during market hours, so the price of a stock can fluctuate wildly in a few minutes, especially if there is bad news.
  
  

Gapping

• When a stock opens much higher than it closed the previous day it is said to have "gapped" higher or lower overnight. It does this because of what happened during after-hours trading.