What is Pre-Open Market Session in Stock Market? (2024)

FAQs

What is Pre-Open Market Session in Stock Market? ›

The pre-market is a period of trading activity that occurs before the stock market opens. Though its trading session typically occurs from 8 a.m. to 9:30 a.m. ET each trading day, several direct-access brokers allow access to pre-market trading to commence as early as 4 a.m.

What is the Pre-Open Market Session? Pre-Open market session is utilised to arrive at the ideal opening price of a stock for the current trading session. The duration of the pre-open market session is from 9:00 a.m. to 9:15 a.m. which is 15 minutes before the trading session starts on: NSE and BSE.

Pre-opening market is a strategy which is adopted to deal with heavy market volatility which might happen due to some events or announcements before the market opens for actual trading.

Pre-market trading lets you place trades outside the typical market hours, but that ability doesn't mean you should do so. With a thin and illiquid market, it can be easy to make a trade at a bad price when you could wait a bit longer and get a better price in the more robust regular market.

Breakdown of the pre-open market session

During this session, you can place orders to buy and sell shares. In addition, you can also modify or cancel orders. The system randomly closes the session between the 07th minute and 08th minute, no orders can be placed, modified, or cancelled after the closure of this period.

So here's the lowdown: From 7am to 10am, we enter what's called the 'Pre-open' market window. This period allows for trade orders to be submitted into the market, although trading hasn't commenced yet.

Traders use pre-market movements to gauge how markets might operate on full opening. However, they operate under more constraints and with much lower liquidity than during regular trading hours. Trading pre-market is most common on the back of new information about an asset.

While any trader can trade during pre-market hours, this period requires a high level of market awareness, strategy, and experience.

The pre-market is a period of trading activity that occurs before the stock market opens. Though its trading session typically occurs from 8 a.m. to 9:30 a.m. ET each trading day, several direct-access brokers allow access to pre-market trading to commence as early as 4 a.m.

Can I buy and sell in pre-market? ›

Investors can place pre market orders to buy or sell stocks during trading pre market, which typically occurs in the early morning. However, it's important to note that not all stocks are available for trading premarket during this NSE pre open market time.

There are several factors that can impact the accuracy of pre-market trading. One of the main issues is the lack of liquidity during these pre-market hours, which can lead to wider spreads between bid and ask prices. This can result in price fluctuations that may not accurately reflect the true value of a security.

Pre-Open Session

The pre-opening session is the timing before the market opens, i.e., between 9 and 9:15 a.m. In addition, two sessions may be added to this time frame. First, between 9:00 a.m. to 9:08 a.m., where the buy and sell orders are gathered, considered, or cancelled based on the order.

With all these factors taken into consideration, the best time of day to trade is 9:30 to 10:30 am. The stock market opens for trading at 9:15 AM and in the first 15 minutes, the market is still responding to the previous day's news with experienced traders waiting to make their move.

The opening period (9:30 a.m. to 10:30 a.m. Eastern Time) is often one of the best hours of the day for day trading, offering the biggest moves in the shortest amount of time. A lot of professional day traders stop trading around 11:30 a.m. because that is when volatility and volume tend to taper off.

Pre-market trading is the period before regular trading hours where traders can schedule trades. These trades are not executed until regular trading hours, which means they may not be the real moves the market is going to make that trading day.

pre·​open·​ing ˌprē-ˈōp-niŋ -ˈō-pə- variants or pre-opening. : occurring before something (such as a store) opens for business.

The rise of electronic trading networks and a desire to be competitive caused the major U.S. stock exchanges to allow trading before and after the regular market hours of 9:30 a.m. to 4 p.m. ET in the early 1990s. Pre-market trading typically occurs from 8 a.m. to 9:30 a.m., though it can begin as early as 4 a.m. ET.

Options are generally not available for trading in the pre-market. Most options can only be traded during regular market hours, although some index options can be traded during extended hours.