What is Pre-Market Trading?
Pre-market trading is stock trading that takes place before the official 9:30 opening of the stock market, usually between 8:00 and 9:30 am. Pre-market trading became popular during the 1990s as a way for investors to trade stocks based on early morning news. Types of Pre-Market Trades All stocks listed on the major U.S. stock exchanges are available to trade in the pre-market hours. When placing a pre-market trade, investors are required to place limit orders. This means that their stock orders must specify the maximum price they will pay for a stock or the minimum price at which they are willing to sell a stock. Investors are required to use limit orders because the volume of shares traded in pre-market hours is usually very light, so the limit orders ensure that the stock prices are traded fairly during the pre-market trading hours. What Stocks Trade Actively During Pre-Market Trading? The most active stocks during the pre-market trading hours are stocks of companies that are in the
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