Why do stock prices sometimes shift significantly after the market closes?
Stock prices can change after market close due to after-hours trading, which allows investors to buy and sell stocks outside of regular market hours. This trading is often influenced by news releases, earnings reports, or global events that occur after the market closes, prompting investors to react before the next trading day. Because after-hours trading typically has lower volume, price movements can be more volatile and may not always reflect the next day’s opening price. These changes can provide early signals for the next session, but they also carry higher risk due to less liquidity.,