Pre-market, regular market, and after market trading are the three times during the day where stock trading is done. The highest volume is seen during regular hours of the stock market which is from 9:30am EST till 4:00pm EST. There are two sessions before and after the regular market session. There is a pre-market session which begins at 7:00am Eastern Time and goes till 9:30am Eastern. Then there is an after market session from 4:00pm Eastern Time till 8:00pm Eastern. Let’s take a look at a few things you should know and understand before attempting after hours stock trading.
When Earnings Reports Are Released
During pre market and after market hours there are numerous reports that come out. These reports can add volatility to certain stocks and create an opportunity for a stock trader to capitalize on. The most common news report are earnings reports which will come out on individual stocks during pre-market and after-market. Be sure to not just look at the stock that has earnings coming out but also watch their competitors. You can find out earnings schedules on Yahoo Finance.
The Value of Economic Reports
Economic reports are another type of report that typically come out during pre market hours. These reports will generally have an impact on the market overall rather than individual stocks. Again, you can find a schedule of economic reports as well on Yahoo Finance.
There are some things to consider when trading outside regular market hours that you may want to understand. This is a time where spreads between the bid and ask can be quite wide do to the lack of volume. Also, most brokerages/platforms will not allow market orders so you can only enter orders via a limit order. This doesn’t guarantee you a fill and makes stop market orders obsolete.
Final Notes
With the right strategy that is profitable and consistent, trading during premarket and after market hours can be a valuable tool for just about any trader. Be sure you have practiced your strategy and are confident with it. You may even consider signing up for Stock Market Coaching to accelerate your learning curve. Also, beware that most of the trading that is being done during pre-market and after-market hours is done by professional traders. Regardless of when you are trading, it is always important to know who your competition is.