A:

"

After the bell" is financial slang for activity occurring after the close of the stock market, including after-hours trading, illegal late trading of open-ended funds (during the mutual fund scandal of 2003), earnings announcements, acquisition plans and merger agreements. The term originates from the ringing of the bell on the NYSE, which denotes the open and close of trading sessions.

Generally, important, company-specific news is released after the bell to give investors time to dig through the information and make informed buy and sell decisions. In addition, announcements after the close of trading provide order and stability to the markets. News released during the trading day or before the bell (prior to the start of the trading session) could generate negative consequences, like panic-selling, unbridled speculation and buy/sell imbalances. Pertinent news announced after the bell leads traders to trade stock based on the fresh information, although in very thin markets. However, it should be noted that traders may trade stock after the bell for a variety of reasons, which may not be related to company news releases. (For more on this topic, read What is after-hours trading?)

This question was answered by Justin Bynum.

RELATED FAQS
  1. What trends and data influence after-hours traders the most?

    Learn about the specific information that after-hours traders review to influence their trading. Read Answer >>
  2. Why are the bid and ask quotes usually so far away from each other in after-hours ...

    After-hours trading is defined as the exchange of securities outside of an exchange's specified regular trading hours (usually ... Read Answer >>
  3. Where can I find information about pre- and after-hours trading on the NYSE and the ...

    The stock market, particularly the NYSE and Nasdaq, is traditionally open between 9:30am and 4pm EST. Over time, with the ... Read Answer >>
  4. Does the closing price have to equal the last price traded?

    Logically and theoretically, the last price traded should be the same as the closing price of a stock. However, the way we ... Read Answer >>
  5. What is the best time of the day to trade?

    Unlike traditional investing, trading, or day trading, has a very short-term focus. Analysis may be broken down to days, ... Read Answer >>
  6. Can an open-ended fund's price appreciate significantly?

    Theoretically, open-end mutual fund prices can experience a significant increase in price. However, three factors need to ... Read Answer >>
Related Articles
  1. Brokers

    The Tradition Of The NYSE Bell

    Ringing the NYSE bell has become a time-honored tradition that has included many celebrities, athletes and notable personalities.
  2. Trading Strategies

    What Is The Difference Between After-Hours Trading And Late Trading?

    “After-hours” trading and “late trading” both refer to investments made outside of normal business hours. While the two activities sound similar and often take place in similar time frames, the ...
  3. Term

    What's After-Hours Trading?

    After-hours trading occurs on major exchanges outside of regular trading hours, and takes place between 4:30 and 8 p.m. Eastern time.
  4. Stock Analysis

    Yum! Brands' Taco Bell Steps Up Breakfast Battle

    When Yum! Brands' (NYSE: YUM) Taco Bell first started offering breakfast in 2014, its commercials made it very clear that it hoped to take customers from McDonald's (NYSE: MCD). Now, the Mexican ...
  5. Stock Analysis

    Can a New Look Change How People See Taco Bell?

    The restaurant chain that once pushed the gluttony of "Fourth Meal," a fast-food purveyor that has generally marketed itself to younger customers based on value, now wants people to take it ...
  6. Mutual Funds & ETFs

    Why Late Trading Is Illegal

    Institutional investors got a sweet deal that soured retail investors' mutual fund returns.
  7. Investing Basics

    Understanding Open-End Funds

    An open-end fund is a type of mutual fund that does not limit the amount of shares it issues, but issues as many shares as investors are willing to buy.
  8. Mutual Funds & ETFs

    4 Alternatives To Traditional Mutual Funds

    A rich offering of attractive alternatives have the open-ended mutual fund facing obsolescence.
  9. Fundamental Analysis

    The Right Trading Position For A Good Night's Rest

    The last hour of the trading day is the perfect time to ask these questions about your overnight exposure.
  10. Markets

    5 Tricks Companies Use During Earnings Season

    Don't be fooled: Companies use all kinds of tactics to make bad earnings look good. Find out how to see through them.
RELATED TERMS
  1. Opening Bell

    A bell that is rung to signify the start of the day's trading ...
  2. Trading Session

    A period of time consisting of one day of business in a financial ...
  3. Bell

    The musical instrument that is sounded to signify the beginning ...
  4. Nasdaq-100 After Hours Indicator

    An indicator of post-market sentiment and trading activity, calculated ...
  5. Open-End Fund

    A type of mutual fund that does not have restrictions on the ...
  6. Symmetrical Distribution

    A situation in which the values of variables occur at regular ...
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center