What Securities Can Be Traded in the Pre-Market Session?

What is Pre-Market Trading?

Trading takes place before the normal market session, which is called “Pre-Market Trading.” Every trading day, the pre-market trading time lasts from 8 a.m. to 9:30 a.m. EST. A lot of investors and traders look at the buying that happens before the market opens to get an idea of how strong and where the market is going. A limited number of orders can be filled through an “electronic market” such as an alternative trading system (ATS) or electronic communication network (ECN) before the market opens. Market makers can’t carry out orders until the starting bell at 9:30 a.m. EST....

How does Pre-Market Work?

1. Buying or selling stocks before or after market hours is a little different from investing during regular business hours. Orders go through a market like the Nasdaq or New York Stock market during the trading day....

Benefits of Pre-Market Trading

Pre-market trading and after-hours trading also known as Extended-hours selling, includes trading before and after market hours, has the same benefits:...

Risks of Pre-Market Trading

Now let’s talk about the risks of dealing before the market opens....

Pre-Market Trading Time

Trades before the market open can begin as early as 4 a.m. EST, but most of them happen between 8 a.m. EST and 9:30 a.m. EST, when normal trading starts....

Who Can Trade in Pre-Market?

A certain group of market participants can trade before the market opens, as long as they have access to the trading sites that allow it. These are the main types of people and businesses that can trade before the market opens,...

What Securities Can Be Traded in the Pre-Market Session?

In the pre-market session, only stocks that are on the stock market can usually be sold. But not all stocks. Small-cap stocks, stocks with a limited float, or stocks that aren’t owned by many people, might not have enough trading volume to make pre-market trading work. In the pre-market time, you can’t trade options....

Difference Between Pre-Market and After Hours

Basis Pre-Market Trading After-Hours Trading Timeframe Before the market officially opens, starting around 4:00 a.m. and finishing at 9:30 a.m. Eastern Time. After the market closes, which is usually between 4:00 p.m. and 8:00 p.m. Eastern Time, though some sites may keep the doors open later. Participants Individual investors, traders, and institutional investors can all use pre-market trading sites. Participants are the same as in the pre-market: traders, institutional investors, and individual investors who can access trading tools after market hours. Volume and Liquidity Lower trading volume compared to regular hours, and liquidity may be limited. Prices can be more volatile due to fewer participants. Generally lower trading volumes and limited liquidity compared to regular hours. Prices may be more susceptible to significant swings. Bid-Ask Spreads Bid-ask spreads may be wider compared to regular hours due to lower liquidity. Bid-ask spreads may be wider than usual during normal trading hours, just like they are before the market opens. News Impact News and events that happen overnight or prior to the market starts can have an effect on prices. Prices can react to news and events that are released after the official market closing. Availability Not all stocks are actively traded during pre-market hours, and availability may vary. Similar availability like Pre-market trading Brokerage Platform Access Availability of pre-market trading may vary by brokerage. Not all platforms offer this feature. Availability of after-hours trading may vary by brokerage. Not all platforms offer this feature....

Frequently Asked Questions (FAQs)

Who can buy before the market opens?...