RE: Showing $150 now in the pre market....20 Nov 2025 14:06
✅ Why After-Hours Prices Aren’t Predictive
1. Liquidity is extremely low
After regular trading hours, there are far fewer buyers and sellers.
So even a small order can move the price significantly. This creates illusory moves that don’t represent broad market sentiment.
2. Many participants aren’t active after hours
Large institutions, mutual funds, pension funds, and many algo systems do most of their trading during regular hours.
After-hours moves often reflect retail traders or a handful of algos, not the “real” market.
3. Bid–ask spreads widen
Wider spreads mean:
trades execute at worse prices
a single market order can jump the spread
resulting prints look dramatic but don’t mean much
4. Price discovery resumes at the open
At the opening auction:
institutional orders flood in
market makers step in
liquidity normalizes
This can completely erase or reverse the after-hours move.