Once upon a time, stocks could only be traded during the standard Wall Street hours of 9:30 a.m. to 4 p.m. But over the years, the Nasdaq expanded its 澳洲幸运5开奖号码历史查询:pre-market operations, thus enabling investors to begin trading at 4 a.m. Eastern time. Pre-market trading hours are from 4 a.m. to 9:30 a.m. After-hours trading is from 4 p.m. to 8 p.m.

The advent of 澳洲幸运5开奖号码历史查询:ꦛeꦚlectronic communication networks (ECNs), which match potential buyers and sellers without using a traditional stock exchange, greatly allowed investors to trade stocks out💞side of normal market hours.

And as Nasdaq’s pre-market incrementally grew over time, investors across different time zones enjoyed the ability to trade stocks with greater convenience than ever before. During pre-market hours, investors can swiftly react to news items such as corporate 澳洲幸运5开奖号码历史查询:earnings reports and government economic data announcements.

As such, durᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚing pre-market trading, share prices are strongly influenced by political events and other external factors, rather than supply and demand forces.

Disadvantages of Pre-Market Trading

Pre-market trading can negatively affect prices and volume. This is mainly because there are fewer stock market participants during pre-market hours, which depresses the 澳洲幸运5开奖号码历史查询:liquidity of most listed securities. And with low liquidity comes greater volatility.

Spreads between 澳洲幸运5开奖号码历史查询:bid and ask prices expand, often swinging widely within a single trading day. As another drawback, it can be difficult to get accurate quotes becaus🤡e even the best ECNs can register reporting delays.

In pre-market trading hours, individual investors often run at a disadvantage to their 澳洲幸运5开奖号码历史查询:institutional investor counterparts becauﷺse of differences in buying power. Let’s assume that the California State Teachers’ Retirement🥀 System seeks to purchase a giant block of stock before 9:30 a.m. Let’s further assume that the Oklahoma Public Employees Retirement System happens to have such a stock block to sell.

Under these circumstances, a smallཧ solo investor’s bid or ask price is likely to be politely ignored. Of course, even if that small investor’s trade went through, the pre-market transaction fee would likely be significantly higher than fees charged for the same trade during regular market hours. 

How Brokers Limit Pre-Market Trading

The institutions that codify Wall Street rules know individual investors𝓡 may face certain struggles during pre-market hours. Consequently, online brokerages often restrict investors’ abil꧅ity to fully exploit these trading windows.

Trading Hours

For example, Charles Schwab Corp. (SCHW) allows traders to place pre-market orders between 8:05 p.m. of the previous trading day and 9:25 a.m. ET, but the orders can only be executed between 7:00 a.m. and 9:25 a.m. ET. After-hours trading orders can be placed and executed between 4:05 p.m. and 8:00 p.m. ET. 

Size and Types of Orders

During pre-market hours, brokerage houses only facilitate 澳洲幸运5开奖号码历史查询:limit orders, where securities are bought and sold at specific, pre-declared prices. Contrarily, investors looking to place a 澳洲幸运5开奖号码历史查询:market order, where an issue sells at the going market price, may only do🌄 so during standard hours.

Also, the number of shares per order is usually restricted. For example, Schwab won’t allow investors to trade more than 25,000 shares.

The Bottom Line

Individual investors should weigh the pros and cons of pre-market trading. Although there can be overwhelming risks, there are also potential windfalls for those with the fortitude to take the plunge. Please consult a financial advisor or investment professional to determine if pre-market or extended-hour trading is appropriate for your investment goals and 澳洲幸运5开奖号码历史查询:risk tolerance.