Process is the same as when creating primary partition but the only difference here is that you can’t choose a drive letter and there are no formatting options. This is because extended partition is only a container for the logical drives. It can not be formatted in any file system which means that it can not store any data. In other words, extended partition can be represented as a virtual drive containing multiple partitions (these are the logical drives). Remember also that you can create only one extended partition within a hard drive.

To create an extended partition right click on the unallocated space and select New partition, but this time in the second window of the New partition wizard you will need to select Extended partition option.

Now set the desired drive size and press Next.  Since you can not create more than one extended partition within a hard drive I suggest you use the whole unallocated space unless you intend to create another primary partition.

The next window will provide summary information about the partitions you create, then you can click  Finish  to complete the process.

The final result should be similar to the picture below but remember that in order to be able to use your new extended partition, it must contain at least one logical drive.