Money doesn’t sleep. Although the exchange has defined opening hours, there is much to learn and be aware of activities outside of business hours. Some of the most important lessons can be learned outside of the official timeline of the often volatile trading space.
Using the pre-market and post-market times to analyze trends and try to predict the market outlook can have a huge impact on the success of your decisions at peak times.
Pre-market refers to the time before the opening bell rings, when traders and investors assess the market outlook. This is valuable time as it gives you the opportunity to review the results of after-hours activity and apply it to the information, which is typically released an hour before market opens. These economic indicators are the key components related to price movements. This data can help analysts make decisions about current or future investment opportunities.
In some cases, economic indicators can also show changes in the general health of the economy. Unemployment rates and oil prices are examples of economic indicators that change frequently and can affect the stock market. Current events can also affect massive market movements. Current and major geopolitical news events, often reported on evenings and weekends, can surprise the market at any time of the day. Having access to the market before it opens will allow you to position yourself in a more convenient place for Maritage risk in the event of unforeseen events.
It is common for companies to release their quarterly results either after the market closes or just before the market opens. These announcements can have a major impact on trading activity in either direction. For example, announcing an acquisition can have positive consequences for dealers, while bankruptcy can of course have negative effects. A company’s stock price and health are related to these earnings releases. It is therefore important as a trader or investor to be informed about them. You can take advantage of this after-hours reporting by positioning yourself outside of business hours to get in or out of certain companies as soon as the market opens.
Technology has made it increasingly popular to trade after the close of trading. Digital trading platforms have made it easy for investors and traders to access opportunities around the clock. An important aspect of the trading hours before and after placing on the market is the understanding that there is a significantly higher risk when trading during these times.
Once you know how beneficial and costly to trade during these time frames, you will learn how to take advantage of them. Before the market opens, the volume is less so you cannot quickly get in and out of positions. The same low volume after hours can impact aspects such as difficulty in fulfilling your order at a reasonable price. While there is an upside factor in not being tied to market opening times, the higher volatility may ultimately not be worth it.