Booyah Breakdown: After Hours

Trading stocks after hours used to be just as risky as sitting down next to the high rollers in Vegas.

With more information available to improve your odds, after-hours trading may not be quite so risky anymore. But it can still be just as dangerous as playing blackjack with your eyes closed, and that's exactly why Jim Cramer discourages it.

As with all types of gambling, however, there can actually be a bit of upside to after-hours and (for you early birds) pre-market trading, so the Booyah Breakdown is going to explore the arguments both for and against playing in these markets.

The New York Stock Exchange and the Nasdaq are open only from 9:30 a.m. to 4 p.m. EST.

But the early and after-hours markets allow you to trade from 8 a.m. to 9:30 a.m. EST and from 4 p.m. to 6:30 p.m. EST, respectively.

Broadly speaking, these markets function in the same way as the regular market. Shares are traded between parties at an agreed-upon price. So if you make a trade in the after-hours market, the price you receive is the price that someone is willing to pay for your shares.

But you can't place a trade with your broker during those hours. Instead, you must place it through an electronic communication network, a.k.a. an ECN. So there are no humans involved.

The After-Hours Stakes

While trading before the market opens or after it closes can boost your gains, there are major risks, which is, again, why Cramer advises you to step back from the poker table.