What Is Pre-Market Trading?
Pre-market trading runs from 4:00 AM to 9:30 AM ET on US equity markets, before the regular session begins. It exists for traders to react to overnight news — international markets, earnings releases, economic data — before the official open.
Like after-hours, pre-market suffers from thin liquidity and wide spreads. Stocks may show 5% moves on a few thousand shares traded, only to revert at the open when proper liquidity arrives. Pre-market gaps frequently 'fill' (price returns to prior close) within the first hour of regular trading.
Pre-market is most useful for getting a directional read before the open and adjusting plans accordingly. Position-level moves should generally wait for the regular session unless news is large enough to demand immediate action. Most retail traders shouldn't be placing pre-market orders without understanding how much they're paying in slippage.
Related terms
- After-Hours Trading — Trading session running after the regular market close, with thinner liquidity.
- Gap Up — Price opening significantly higher than the prior close, leaving a 'gap' on the chart.
- Earnings Report — Quarterly publication of a company's financial results.
- Liquidity — The ease with which an asset can be bought or sold without significantly affecting its price.