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https://www.selfwealth.com.au/blog/pre-market-trading-now-available-for-us-stocks/

Pre Market Trading Now Available For US Stocks

We’ve rolled out our newest feature with the integration of pre-market trading for US stocks!

Whether you’re tired of missing out on opportunities that get away from you when the market opens, or simply can’t get enough of the stock market, SelfWealth has you covered.

If you’re new to US shares, continue reading for an understanding of how pre-market trading works, as well as some of the potential benefits and risks involved.

What is pre-market trading?

Unlike the ASX, where retail investors may only submit or amend orders during pre-market hours, the US share market features a pre-market (and post-market) trading session.

This session provides investors the opportunity to buy and sell stocks before the US share market opens for regular trading at 9:30am EST.

Pre-market trading may begin as early as 4am EST, although access to this session varies from one broker to the next — and many brokers don’t provides access at all. Where pre-market trading for US stocks is available, trading hours are typically between 7am and 9:30am EST.

During pre-market trading prices are often volatile and there is greater risk to investors. This is because there are typically fewer investors participating in the session, which means lower trading volume(s), larger spreads, and potentially more difficulty executing trades than during the regular trading session.

It is not uncommon for some stocks to see large fluctuations in a short period of time. Furthermore, while the regular trading session may see a stock enter a temporary halt on a significant price fluctuation, called a circuit breaker, this does not apply in pre-market trading. Because of these risks, investors are generally required to opt-in to pre-market trading in the US each session.

What are some of the benefits of pre-market trading?

There are a number of potential benefits when it comes to pre-market trading for US stocks. With this in mind, we are delighted to give SelfWealth members greater flexibility in making investment decisions. Some of the potential benefits include:

• Trade sensitive news: Big moves in stock prices often unfold in the pre-market trading session following company announcements, earnings reports, news events, and the release of economic data. Pre-market trading allows you to make investment decisions when news and data first becomes available.
• Access live trading at a more convenient time: As the regular trading hours for US shares fall late into the night for Australian investors, pre-market trading provides an alternative for investors to participate in live trading sessions, instead of relying on orders placed overnight
• Gauge sentiment towards stock: Pre-market trading may be used to get an indication as to where a stock might open at the beginning of the regular trading session
• Analyse price action: In some instances, the price range during pre-market trading has the potential to form support and resistance levels during the regular trading session