The majority of trading activity in the American stock market occurs during regular trading hours, from 9:30 a.m. EST until 4:00 p.m. EST. However, most major brokerages facilitate pre-market trading for retail and institutional investors.
Pre-market trading takes place from as early as 4:00 a.m. EST to 9:30 a.m. EST when the market opens for regular trading hours.
Pre-market trading hours vary from broker to broker, and pre-market trading volume is greatest before the market opens for regular trading. Trading outside of regular hours is handled through electronic communication networks, or ECNs. ECNs allow traders to participate directly with one another while the exchanges are closed.
Pre-market trading carries more risk, as less volume creates illiquid markets and wider bid-ask spreads, but also allows investors to take advantage of unique opportunities before the market opens.
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