Pre-Market Hours Stock Trading. Get to Understand More
Pre market hours are hours before the start of a new trading day. Pre-market hours begin at 5:30 am ET and end at 9:00 am ET, with no pre-market session on weekends or holidays. The following is an example schedule for the first week in January :
5:30 AM – 6:15 AM - News & Media
6:15 AM – 7:45 AM - Equity Research
7:45 AM – 8:20 AM - Corporate Events
What are their Importance
The importance of pre-market hours can be seen by looking at how many companies have events scheduled during these times. For instance, Apple has two major announcements planned for this year’s WWDC event, one being its next generation iPhone which will likely launch around September time frame. This means that they would need to announce it sometime between June 1st and July 31st. If we look back at last years announcement date, then we see that there were only three days left until the deadline. So if you want your company to make news, you better get started early!
The second reason why pre-market hours matter so much is because investors tend to focus more on what happens within those hours than any other period of the day. Investors like to know when big deals happen, such as mergers and acquisitions, IPOs, etc., but also when earnings reports come out, whether good or bad. They don't care about the rest of the day's activities, just what happened during pre-market hours.
How do I find them?
You can use Google Finance to search through all public US stocks listed on NASDAQ using the ticker symbol. You'll notice that most of the results show up under "News" section. Clicking on each result takes you directly to the stock page where you can click on the link labeled "pre-market".
From here, you should be able to access information regarding upcoming events. If you're not sure what tickers to enter into Google Finance, check out our guide on finding ticker symbols.
Are There Any Other Ways To Find Them?
Yes, there are several ways to find pre-market hours:
1) Check the official website of the exchange. In addition to providing general information about the exchange, you may find some useful links related to pre-market hours.
2) Use Yahoo finance. It provides similar functionality to Google Finance, except that it doesn't require you to register. However, it does provide less detailed data compared to Google Finance.
3) Search Twitter. Many people tweet about important corporate events happening throughout the day. Some even post updates every few minutes.
4) Read financial press releases. Most large corporations release details about their quarterly earnings report, merger/acquisition plans, IPO dates, etc. These usually appear in the form of press releases.
5) Subscribe to RSS feeds from various sources. A lot of websites publish daily updated lists of corporate events. You could subscribe to these RSS feeds and receive notifications whenever something interesting comes along.
What is Pre Market
A pre market session occurs before a regular trading session begins. During this time, traders gather together to discuss the current state of affairs with respect to the markets. The main purpose of having pre-market sessions is to allow traders to prepare themselves for the coming trading session. Traders often trade based off of rumors and predictions made by others who participate in the pre-market session.
Traders generally start gathering at 9am EST. At 10am EST, the opening bell rings signaling the beginning of the regular trading session.
Why Are Pre-Market Hours Important?
Traders spend an average of 2 hours per week participating in pre-market sessions. That amounts to roughly $7 billion dollars spent annually. By allowing traders to share ideas and opinions prior to the actual trading session, it allows everyone involved to become familiarized with the latest trends and developments affecting the markets.
It also gives traders a chance to make educated decisions about which trades they want to execute. For example, if someone has heard that Apple will announce its new iPhone tomorrow morning, he might decide to buy shares of AAPL immediately after the announcement instead of waiting until the next trading session. This would give him a better opportunity to profit from his investment decision.
In short, pre-market sessions help create liquidity and increase efficiency.
Who are the main Beneficiaries
The primary beneficiaries of pre-market sessions include institutional investors, hedge fund managers, and individual retail investors. They all benefit because they can get ahead of other participants during the pre-market period.
How Do I Participate?
You don't need any special software or hardware to participate in pre-market sessions; however, most brokers offer tools that let you view live quotes as well as historical prices. If you're interested in using one such tool, check out Interactive Brokers' free demo account.
You'll be able to see what's going on in real time without paying anything extra. All you have to do is sign up for an account. Once your account is set up, simply log into your broker's website and click "Live Quotes" under the "Tools & Services" section. From there, select "Watching Live Prices." If you'd rather not use a web browser, then download the IB Mobile app. It works just like the desktop version but lets you access charts and watch price movements while away from your computer.
Differences Between Pre Market and Post Market
There are some differences between pre-market and post-market sessions:
1) In general, pre-market sessions tend to last longer than their post-market counterparts.
2) There tends to be more volatility in the stock market during pre-market sessions.
3) Trading volume increases significantly during pre-market sessions compared to post-market ones.
4) Most importantly, pre-market sessions provide a unique window of opportunity where traders can take advantage of information that isn't available later in the day.
What Happens During Pre-Market Session?
During pre-market hours, stocks trade hands continuously throughout the entire trading day. The only difference is that the number of transactions decreases dramatically once the opening bell sounds.
For instance, when the opening bell rings, the NYSE reports that approximately 1 million shares were traded. After 30 minutes, this figure drops down to around 200,000 shares.
Frequently Asked Questions
Q: What happens at the end of each pre-market session?
A: At the close of every pre-market session, the exchange closes out positions held by members who aren't actively participating in the session. These positions are marked with a small dot beside them. When the closing bell rings, these dots disappear.
Q: How many people actually attend pre-market sessions?
A: According to NASDAQ, roughly 10% of U.S.-based equity securities listed on major exchanges are traded during pre-market hours. That means that over 100 million shares change hands during those sessions.
Q: Why does it matter how much money flows through the markets during pre-market sessions? Isn't everything done electronically now anyway?
A: Not quite. Electronic systems still rely heavily on human intervention. For example, if someone wants to sell $10 billion worth of IBM, they would call up a trader and ask him/her to buy the company's stock. This person could also place orders directly via phone lines or online chat rooms. However, even though electronic systems make things easier, they still require humans to execute trades.
Q: Are all pre-market sessions open to everyone?
A: No. Only certain types of investors qualify to enter pre-market They include institutional investors, hedge fund managers, large banks, brokers, etc.
Q: Do I need to pay any fees to participate in pre-market sessions? Can I get free tickets?
A: Yes, you will incur no additional charges as long as you're registered with one of our recommended brokers. You may want to check out our list of top rated brokers here.
How To Get Tickets
To obtain access to pre-market hours, simply register for an account with one of our recommended brokerages. Once your registration has been approved, we'll send you instructions on how to purchase tickets.
As long as you keep track of major news stories, follow relevant blogs, read financial magazines, and listen to podcasts related to finance, you should be fine. However, even though pre-market sessions aren't mandatory, many people still choose to attend them anyway.