Trading before and after the open and close has improved with moreefficient trading systems and better liquidity. Anything to help match uporders helps, and with more individuals participating it has helpedliquidity. One of the problems with trading outside ‘normal’ hours isthat there is no market maker; orders have to be matched based on size andprice. Thus you can put in an order at the ask or bid and not be filledsimply because there is no matching counterpart to your order. Thus itcan be hard to get out of positions in the outside hours.
The price swings you see are typical of these sessions. As we see withlight volume days, if one side of the market takes over it can push priceshard. Or you can have big swings back and forth. It comes back toliquidity, and with fewer participants it is harder to find an equilibriumprice and thus the price swings. You might want to buy for a quick turnfor that 20% move, but due to the matching system of orders you may notget the other side of your play completed. Also, the closer you get tothe open premarket, the more realistic a price you will have versus say1.5 hours before the open. After the close the further you move from thebell, the less and less reliable the action becomes.
This does not mean you cannot buy and sell in the outside hours and makemoney. Things have improved as far as matching orders. You have to knowgoing in that getting the fill moving into and out of positions is not assimple as during regular hours.