What is US Pre-Open and Post-Close (Pre Market / Post Market)?
The US stock market has regular trading hours from 9:30 a.m. to 4 p.m. ET on weekdays. However, investors can also trade before and after these hours in what are known as pre-market and post-market sessions. These sessions allow traders to take advantage of news events, earnings reports, or other factors that may affect the market outside of normal hours.
Pre-market trading typically occurs between 8 a.m. and 9:30 a.m., though it can begin as early as 4 a.m. ET. Post-market trading starts at 4 p.m. and can run as late as 8 p.m. ET. These sessions are also called extended-hours trading, and they are available through electronic communication networks (ECNs) that match buyers and sellers without using an exchange.
There are some benefits and risks associated with pre-market and post-market trading. Some of the benefits include:
- The ability to react quickly to breaking news or earnings announcements that may affect the price of a stock.
- The opportunity to trade at more favorable prices than during regular hours, especially if there is low liquidity or high volatility in the market.
- The chance to gain an edge over other traders who only trade during regular hours.
Some of the risks include:
- The lack of liquidity and volume, which can make it harder to execute orders at desired prices or quantities.
- The higher volatility and wider spreads, which can increase the risk of losing money or getting a worse deal than expected.
- The reduced competition and regulation, which can expose traders to more market manipulation or fraud.
Pre-market and post-market trading are not for everyone. They require more experience, skill, and discipline than regular-hours trading. They also involve different rules and fees than regular-hours trading. Therefore, investors should do their research and understand the pros and cons before engaging in pre-market and post-market trading.