# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Pre-Market Trading

Written By
Paul Tracy
Updated September 30, 2020

What is Pre-Market Trading?

Pre-market trading is the trading that occurs on electronic market exchanges before regular stock market trading hours begin.

How Does Pre-Market Trading Work?

In the U.S., pre-market trading occurs between 8:00 a.m. and 9:30 a.m. Eastern Standard Time (EST), and after-market trading typically occurs between 4:00 p.m. and 6:30 p.m. EST. After-hours trading is usually abbreviated with the acronym AH.

Until recently, pre-market trading volume has been relatively low -- typically the domain of big institutional investors who had the confidence to engage in unorthodox trading methods. However, the volume of extended trading has grown in recent years as retail investors become more comfortable with the idea of trading over an electronic communication network(ECN), which is how extended trading takes place.

ECNs connect buyers and sellers over a digital network, eliminating the need for an intermediary such as a broker or investment bank. The Nasdaq market is an example of an ECN. Rather than a physical location such as the New York Stock Exchange, the Nasdaq is a network of securities traders who engage and trade directly with one another.

Why Does Pre-Market Trading Matter?

Pre-market trading allows investors to act quickly to major events that can serve a catalyst for market changes, such as sudden corporate misfortune, political turmoil overseas, late-breaking news, etc.

However, pre-market trading can also be subject to the whims and fears of less-sophisticated investors. Consequently, veteran pros on Wall Street sometimes refer to pre-market trading as "amateur hour."

Ask an Expert about Pre-Market Trading
At InvestingAnswers, all of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Pre-Market Trading.
Be the first to ask a question

If you have a question about Pre-Market Trading, then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers.

If you have a question about Pre-Market Trading, then please ask Paul.

Ask a question Read more from Paul

Read this next

Paul Tracy - profile
Ask an Expert about Pre-Market Trading

By submitting this form you agree with our Privacy Policy

Share
close
Don't Know a Financial Term?
Search our library of 4,000+ terms