7

enter image description here

Why do we sometimes see these massive spikes after hours in certain stocks? They rise very quickly and fall just as fast.

Is it a block trade?

If so, why did the price rise in the first place?

I am still new to the stock market, but what I understand is that when there is more demand compared to supply, it causes the price to increase.

In block trades, companies trade large amounts between eachother, and so for every sell/buy, there is a opposite party willing to buy/sell the full amount.

So why do we see these spikes?

If A wants to sell 100k worth of SHOP to B, and B is willing to buy it,

2 Answers 2

4

In a nutshell, after-hours the ‘kids are playing’.

So a lot of things happen, and the volumes are low. Sometimes somebody buys or sells a larger number of shares ‘at market’, which runs through the order book, resulting in such a peak.

Alternatively, it’s simply bad data.

2

With illiquid stocks, the bid/ask spread usually widens during after hours and if a trader fat fingers a bad trade, they might buy at a much higher price or sell at a much lower price (been there, done that).

Shopify isn't an illiquid stock so most likely, this was just bad data.

2
  • What is "bad data" and why does it happen? Mar 21, 2022 at 9:44
  • 2
    It's Shopify, not Spotify.
    – JAD
    Mar 21, 2022 at 10:22

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .