# After Hours Trading and laws. **URL:** \ **Category:** Factual Questions\ **Created:** [September 17, 2003, 6:16pm UTC](https://boards.straightdope.com/t/after-hours-trading-and-laws/202184 "2003-09-17T18:16:29Z")\ **Posts on this page:** 9\ **Page:** 1
**Author:** ![Cartooniverse](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cartooniverse/32/3084_2.png) [@Cartooniverse](https://boards.straightdope.com/u/Cartooniverse)\ **Post date:** [September 17, 2003, 6:16pm UTC](https://boards.straightdope.com/t/after-hours-trading-and-laws/202184/1 "2003-09-17T18:16:29Z")
I keep hearing stock reports that mention how a stock has moved up or down in “After hours trading”. How the heck can this be, since people get indicted for trading stocks during off-hours times? Cartooniverse ---
**Author:** ![rsa](https://avatars.discourse-cdn.com/v4/letter/r/839c29/32.png) [@rsa](https://boards.straightdope.com/u/rsa)\ **Post date:** [September 17, 2003, 6:31pm UTC](https://boards.straightdope.com/t/after-hours-trading-and-laws/202184/2 "2003-09-17T18:31:54Z")
Check this out: [http://invest-faq.com/articles/trade-after-hours.html](http://invest-faq.com/articles/trade-after-hours.html) ---
**Author:** ![rsa](https://avatars.discourse-cdn.com/v4/letter/r/839c29/32.png) [@rsa](https://boards.straightdope.com/u/rsa)\ **Post date:** [September 17, 2003, 6:33pm UTC](https://boards.straightdope.com/t/after-hours-trading-and-laws/202184/3 "2003-09-17T18:33:49Z")
BTW, I think you may be confusing after hours trading with _insider_ trading as far as criminal activity goes. ---
**Author:** ![Cartooniverse](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cartooniverse/32/3084_2.png) [@Cartooniverse](https://boards.straightdope.com/u/Cartooniverse)\ **Post date:** [September 24, 2003, 1:25am UTC](https://boards.straightdope.com/t/after-hours-trading-and-laws/202184/4 "2003-09-24T01:25:58Z")
Nope. I’m familiar with the different terms. It’s not insider trading, I heard reports on NPR of people being prosecuted for trading after the trading day had ended. How can that be illegal, if the stock reports all report " IBM up 1/8 in after hours trading"??? ---
**Author:** ![Freddy\_the\_Pig](https://avatars.discourse-cdn.com/v4/letter/f/a587f6/32.png) [@Freddy\_the\_Pig](https://boards.straightdope.com/u/Freddy_the_Pig)\ **Post date:** [September 24, 2003, 5:22pm UTC](https://boards.straightdope.com/t/after-hours-trading-and-laws/202184/5 "2003-09-24T17:22:18Z")
There’s nothing illegal about trading stock at any hour of the day or night. I’m afraid you’ll have to provide us with a cite for a situation where this was alleged to be illegal, because there must have been extenuating circumstances. ---
**Author:** ![quothz](https://avatars.discourse-cdn.com/v4/letter/q/da6949/32.png) [@quothz](https://boards.straightdope.com/u/quothz)\ **Post date:** [September 24, 2003, 6:14pm UTC](https://boards.straightdope.com/t/after-hours-trading-and-laws/202184/6 "2003-09-24T18:14:54Z")
Before the summer of '99, after-hours trading was restricted, mostly to those dealing in large blocks, but I don’t recall any prosecutions for violating this. Today, anyone can do after-hours trading on most stock markets, including U.S. markets. ---
**Author:** ![bradthomas](https://avatars.discourse-cdn.com/v4/letter/b/9f8e36/32.png) [@bradthomas](https://boards.straightdope.com/u/bradthomas)\ **Post date:** [September 24, 2003, 6:22pm UTC](https://boards.straightdope.com/t/after-hours-trading-and-laws/202184/7 "2003-09-24T18:22:44Z")
Cartooniverse may be referring to the recent probe by the NY Attourney General regarding after-hours trading of Mutual Funds (not stocks). An expert may correct me if I am wrong, but my impression is that when you order a Mutual Fund trade, it is traded at the end of the day at the EOD price. The suspects in this probe were playing games with the system, for example, after the end of the day, they would decide whether they really wanted the trade to go through, based on post-close announcements. ---
**Author:** ![bradthomas](https://avatars.discourse-cdn.com/v4/letter/b/9f8e36/32.png) [@bradthomas](https://boards.straightdope.com/u/bradthomas)\ **Post date:** [September 24, 2003, 6:22pm UTC](https://boards.straightdope.com/t/after-hours-trading-and-laws/202184/8 "2003-09-24T18:22:52Z")
Cartooniverse may be referring to the recent probe by the NY Attorney General regarding after-hours trading of Mutual Funds (not stocks). An expert may correct me if I am wrong, but my impression is that when you order a Mutual Fund trade, it is traded at the end of the day at the EOD price. The suspects in this probe were playing games with the system, for example, after the end of the day, they would decide whether they really wanted the trade to go through, based on post-close announcements. ---
**Author:** ![Tomcat](https://avatars.discourse-cdn.com/v4/letter/t/8e8cbc/32.png) [@Tomcat](https://boards.straightdope.com/u/Tomcat)\ **Post date:** [September 24, 2003, 6:24pm UTC](https://boards.straightdope.com/t/after-hours-trading-and-laws/202184/9 "2003-09-24T18:24:14Z")
**Cartoon** you are talking about Sptizer’s new rampage _stale pricing, mutual funds and hedge funds_. After hours trading is just another market for people to trade in. It is legal and fully under the eyes and supervision of the markets and the SEC. What you have been hearing about is something that mainly concerns mutual funds and foreign markets. How do you trade the Japanese market in the USA between the hours of 9am and 4pm NY time? Japan’s asleep! So a Japanese mutual fund has to price its value (Net Asset Value or NAV) 14 hours late. From [CNN](http://money.cnn.com/2003/09/03/news/spitzer_hedgefund/): “Japanese stocks, for example, close 14 hours before U.S. stocks. If Japanese stocks fall, then an international mutual fund holding Japanese shares will still reflect those lower prices when they close 14 hours later. If traders are sure Japanese stocks will rise on the next trading day, they can buy the international fund, with its 14-hour-old, “stale” net asset value (NAV), and cash in the next day, when the NAV rises.” and “Late-day trading is like being permitted to bet on yesterday’s horse races,” Spitzer said. “You already know who’s going to win.” An further clarification: Japan closed down yesterday (14 hours ago). But the US Market has gotten great news, especially in the Tech sector. It jumps 5%, so you have a pretty good idea that Japan is going to jump up when it opens in 10 hours, right? If you were able to buy that Japanese fund at “yesterday’s” NAV, then when Japan’s market closes in 10 hours you are guaranteed to make money (because it jumped up following the US). THIS is the problem, certain funds allowed people to ‘Trade late’. While this hasn’t been illegal, per se, it has been immoral. It’s the little guy who has to bear the brunt of these trades - the money has to come from somewhere, right? And it’s not just outright stealing (implying you lose money), this late trading basically means you won’t make _as much_ as you would have. Japan jumps and you’ll make some money, but the guy who traded late will take the lion’s share of that win. Clear as mud? Hope so. Google some of the terms above to learn more. Take care- -Tcat (Operations Director for a Hedge Fund that trades mutual funds and is feeling the pain of the a\*\*holes because everyone now lumps my fund in with those jerks even though I’m not doing anythign remotely similar at all whatsoever)(What, me bitter?)