Introduction
If you are someone who is interested in the stock market, then you must have heard about the term “Pre-Market Hours”. The Pre-Market Hours is the time period before regular trading hours when stock markets are open for trading. In this article, we will discuss what Pre-Market Hours are, when it starts and how it can be beneficial for traders.
What are Pre-Market Hours?
Pre-Market Hours are the time period before regular trading hours, when the stock market is open for trading. It is also known as extended-hours trading. During this time period, traders can buy and sell stocks before the regular trading hours start. The Pre-Market Hours usually start at 4:00 am and end at 9:30 am Eastern Time.
When is Pre-Market Hours?
As mentioned earlier, the Pre-Market Hours usually start at 4:00 am and end at 9:30 am Eastern Time. However, it is important to note that not all stocks are available for trading during the Pre-Market Hours. Some stocks may have restrictions on trading during the Pre-Market Hours, and some may not be available for trading at all.
How to Trade during Pre-Market Hours?
To trade during Pre-Market Hours, you need to have a brokerage account that offers extended-hours trading. Not all brokerage firms offer this service, so you need to check with your broker before you start trading during Pre-Market Hours. Once you have the account, you can place orders for buying and selling stocks during the Pre-Market Hours.
Benefits of Trading during Pre-Market Hours
There are several benefits of trading during Pre-Market Hours. Let’s take a look at some of them:
1. Early Access to News
During the Pre-Market Hours, traders get early access to news and events that can have an impact on the stock market. This can give traders an advantage over others who trade during regular trading hours.
2. Price Volatility
The Pre-Market Hours are known for high price volatility. This can be beneficial for traders who are looking to make quick profits. However, it is important to note that high price volatility also means high risk.
3. More Time to React
Traders who trade during Pre-Market Hours have more time to react to news and events that can have an impact on the stock market. This can help them make better decisions and avoid losses.
4. Access to Global Markets
The Pre-Market Hours also provide access to global markets. This can be beneficial for traders who are looking to trade stocks of companies that are listed on international stock exchanges.
Risks of Trading during Pre-Market Hours
While trading during Pre-Market Hours can be beneficial, it also comes with its own set of risks. Let’s take a look at some of the risks:
1. Low Liquidity
During the Pre-Market Hours, the trading volume is usually low, which can result in low liquidity. This can make it difficult for traders to buy and sell stocks at their desired price.
2. High Risk
As mentioned earlier, the Pre-Market Hours are known for high price volatility. This can result in high risk for traders, who may end up losing money if they are not careful.
3. Limited Access to Stocks
Not all stocks are available for trading during Pre-Market Hours. Some stocks may have restrictions on trading during this time period, while some may not be available for trading at all.
Conclusion
Pre-Market Hours are the time period before regular trading hours, when the stock market is open for trading. It starts at 4:00 am and ends at 9:30 am Eastern Time. Trading during Pre-Market Hours can be beneficial, as it provides early access to news, high price volatility, more time to react and access to global markets. However, it also comes with its own set of risks, such as low liquidity, high risk and limited access to stocks. As with any form of trading, it is important to do your research and understand the risks before you start trading during Pre-Market Hours.
