Pre-Market Trading

What is Pre-Market Trading?

From food markets, to supermarkets, all markets will at some point close. In financial trading pre-market trading is the period in which markets are closed and awaiting the open. Pre-market trading varies depending on the market which is being traded. Regardless of the market which they are hoping to trade, During times where traders are unable to action live positions you typically see the preparation of the upcoming day and opportunities they could present. 

In saying this, some markets, especially in the US have a pre-market session which is between 4:00 a.m. and 9:30 a.m. Eastern Time. This shows the sentiment of where the markets are after the close, and could be at the open, however these after-hours trading usually lack liquidity as the majority of participants would be away.

When does Pre-Market Trading take affect?

Each market has different open and closing times and based on this, we typically see traders react to them in different ways as each open could sometimes differ. Some markets only close for the weekends, others sometimes close on a daily basis. It is vital you know the market hours for the market you would want to be trading, below are some of the main markets and their various opening times.

As there are numerous different exchanges, each country will typically have their own opening / closing times in reference to the local timezone. It’s key that when you are trading you don’t make the mistake of basing those sessions on your own local timezone. We will base the below in GMT.

Stocks/Indices 

US session – 8am – 4:30pm GMT

UK session – 1pm – 9:30pm  GMT

Asian Session – 10pm – 9:30am GMT

Forex

Mon – Thursday – 24 hours

 *closes 10pm Friday – Opens 10pm Sunday*

Can you place orders when the markets are closed?

Generally no, this is like attempting to buy a carton of milk from the supermarket when the shutters are down. It just isn’t meant to be. Some brokers do offer the opportunity to place pending orders when markers are closed, but these are more for physical trading than CFDs.

Can the markets gap?

Yes, gaps are frequent, especially in index or equity markets. Whenever a market closes, if there is a news event which has a big impact, positive or negative towards the flow of the market, you will likely see a gap up or down as a result. When markets gaps you can sometimes find your entry or exit price moved. This is because the market would not have traded at your desired price due to no liquidity at that level, and you will be filled at the first available price.

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