Introduction
Robinhood is a popular trading app that allows users to buy and sell stocks, options, and cryptocurrencies without any commission fees. The app has gained a lot of popularity due to its user-friendly interface, zero commission charges, and the ability to trade during pre-market hours.
What are Pre-Market Hours?
Pre-market hours refer to the period of time before the regular trading hours begin. In the case of the stock market, pre-market hours usually start at 4 am EST and continue until the market opens at 9:30 am EST. During this time, traders can place orders to buy or sell stocks before the market officially opens.
Pre-Market Hours on Robinhood
Robinhood allows its users to trade during pre-market hours for free. This means that traders can place orders to buy or sell stocks before the market opens without incurring any commission fees. However, it is important to note that pre-market trading on Robinhood is only available to users with a Robinhood Gold account.
What is Robinhood Gold?
Robinhood Gold is a premium subscription service offered by Robinhood. It provides users with access to additional features, including the ability to trade during pre-market and after-hours trading, instant deposits, and margin trading.
How to Sign up for Robinhood Gold
To sign up for Robinhood Gold, users must have a Robinhood account and meet certain eligibility requirements. Users must also have a minimum account balance of $2,000 to qualify for Robinhood Gold. Once users meet all the requirements, they can sign up for Robinhood Gold by navigating to the “Account” tab in the app and selecting “Upgrade to Gold.”
Benefits of Pre-Market Trading
Trading during pre-market hours allows traders to react to news and events that may have occurred outside of regular trading hours. For example, if a company releases earnings before the market opens, traders can react to the news and place orders before the market officially opens. Pre-market trading can also be less volatile than regular trading hours, as there are fewer traders and less volume.
Risks of Pre-Market Trading
While pre-market trading can be beneficial, it is important to note that it can also be risky. Pre-market trading is typically less liquid than regular trading hours, which can result in wider bid-ask spreads and slippage. Additionally, news and events that occur outside of regular trading hours can be unpredictable, which can lead to increased volatility and risk.
Tips for Pre-Market Trading
If you decide to trade during pre-market hours, there are a few tips you should keep in mind: 1. Do your research: Before placing any trades, make sure you do your research and understand the news or event that is causing the market to move. 2. Use limit orders: To avoid slippage, it is recommended to use limit orders when trading during pre-market hours. 3. Be cautious: Pre-market trading can be volatile, so it is important to be cautious and avoid making impulsive decisions.
Conclusion
In conclusion, pre-market trading on Robinhood can be a useful tool for traders looking to react to news and events outside of regular trading hours. However, it is important to understand the risks and to approach pre-market trading with caution. By doing your research, using limit orders, and being cautious, you can increase your chances of success when trading during pre-market hours.
