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Pre-Market

Pre-market refers to the trading session that takes place before the official stock market opens, typically between 4:00 AM and 9:30 AM Eastern Time in the United States. During this time, traders can place orders and execute trades, although trading volume is usually lower than during regular market hours. Pre-market trading allows investors to react to overnight news, earnings reports, and global market developments, providing an opportunity to adjust positions before the market opens.

Example

An investor monitors pre-market trading activity to adjust their stock positions based on an earnings report released before the market opens at 9:30 AM.

Key points

• Refers to the trading session before the official market opening.

• Allows traders to react to overnight news and global developments.

• Typically has lower trading volumes and higher volatility than regular trading hours.

Quick Answers to Curious Questions

Pre-market activity provides insight into how the market may open, allowing traders to adjust their strategies before the official session.

Lower liquidity and higher volatility can lead to wider bid-ask spreads, making it challenging to execute trades at desired prices.

Significant pre-market trades can influence the opening price of stocks, setting the tone for trading when the regular session begins.
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