Apple @ $420.41, -$7.00 (-1.64%) as at close of play 24 January 2012
or,
Apple @ $451.20, +$30.79 (+7.32%) as at close of "after hours" play 24 January 2012
or,
Apple @ $451.90, +$31.49 (+7.49%) in pre-market play 25 January 2012.
After hours trading!
Whats that all about then? I can't say its something I understand but is obviously something that goes on and seems to have some kind of official support in the US (and other markets) where the majority of Company reporting seems to be after hours.
The reason I say it seems to have some official support is that I have found a page on the NASDAQ Exchange's site which covers after hours trading in individual shares, in this case Apple (http://www.nasdaq.com/symbol/aapl/after-hours).
I have also enclosed a screenshot but using the link you can see 321 pages of trades starting at 16:00 hours where the first "after hours" price was $420.64, through to 19.59 with a closing "after hours" price of $451.20.
The intervening period actually saw a low of $419 and a high of $468.95.
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So there obviously is a process to trade "after hours" and a not insignificant 6,171,114 Apple shares were traded (the chart volume rising steeply at 16:50ish and then running flat to the end of the session).
It also looks like the time period may be restricted to 4 hours (16:00 to 19:59).
To add to the puzzle a little more this then seems to feed a "pre-market" where (at the time of writing) 24,176 shares have been traded with a low of $449.15 and a high of $452.10
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The pages also contain the following extract:
Data is delayed at least 15 minutes. Nasdaq.com will report pre-market and after hours trades.
Pre-Market trade data will be posted from 8:15 a.m. ET to 7:30 a.m. ET of the following day.
After Hours trades will be posted from 4:15 p.m. ET to 3:30 p.m. ET of the following day."
Pre-Market trade data will be posted from 8:15 a.m. ET to 7:30 a.m. ET of the following day.
After Hours trades will be posted from 4:15 p.m. ET to 3:30 p.m. ET of the following day."
So it seems there is a potentially more volatile way of trading some shares outside of normal market hours and that there "may" be less liquidity as not all Market Makers and Electronic Communications Networks may be participating.
In the case of the NASDAQ: "After-hours trading is only shown if the stock if it is a component of the Nasdaq-100 Index."
Just as an aside the way I understand Market Maker's and ECN's is that:
- ECN's act a little bit like price comparison websites taking prices set by multiple market makers, matching them with buy/sell req and charging a commission on the trade whereas;
- Market Makers (certainly traditionally) are actively setting bid and offer prices and may be looking to influence volumes, liquidity, and directions (sells or buys) with their price and spread strategy. They also make their money on the spreads!
I assume that these are all risk warnings and that the vast majority of individual investors won't have a means of trading in these periods (or want to) but it is interesting and a little disconcerting as a share price could equally be collapsing in after hours trading.
It obviously provides some visibility on opening prices but looks to be more of a playground for the more privileged, influential, and high net-worth investors and institutions.
Related article links:
hello MA,
ReplyDeleteJust seen on bloomburg, Nokia posting losses of 1.2billion euros (ouch). Considering their long term strategic partnership with Microsoft to provide an OS. Would you consider them as a speculative bet.
Hi Ritsut,
ReplyDeleteinteresting one. Obviously a very speculative punt. The alliance with Microsoft is an attraction and their fortunes are aligned with regards to smartphones. I have enclosed an address to an article which has a bit more speculation ie whether certain management changes might lead to Microsoft buying the smartphone division.
Not just sure what that would say about Nokia if they were to do that although they would be receive some cash but not exactly an attractive premium without a success story. Box standard phones doesn't exactly look like a growing or massively profitable market.
I prefer the fortunes of Microsoft with the potential for some market penetrating growth from the smartphone although should that occur then Nokia could well be a significant comeback story.
http://www.forbes.com/sites/terokuittinen/2012/01/06/interview-with-murtazin-will-microsoft-buy-nokias-smartphone-unit/