Which Brokers Allow Pre Market Trading?
Are you an early bird investor looking to get a head start on the market? Pre market trading allows you to buy and sell stocks before the official opening of the stock market. However, not all brokers offer this option to their clients. In this article, we will discuss which brokers in the financial industry allow pre market trading and how it can benefit you as an investor.
What is Pre Market Trading?
Pre market trading is the buying and selling of stocks before the official opening of the stock market. This period typically occurs between 4:00 a.m. and 9:30 a.m. Eastern Time, with the official market opening at 9:30 a.m. Pre market trading allows investors to react to news and events that occur outside of regular trading hours, such as earnings reports or economic data releases.
Benefits of Pre Market Trading
1. React to News Quickly
One of the main benefits of pre market trading is the ability to react quickly to news. If a company reports earnings before the market opens, you can place trades based on this information before other investors have the chance to react.
2. Increased Liquidity
Pre market trading can also provide increased liquidity, as there are typically fewer traders during this time. This can result in more favorable prices for buyers and sellers.
3. Diversification of Risk
By trading in the pre market, investors can diversify their risk exposure and potentially reduce their overall portfolio risk.
Brokers That Allow Pre Market Trading
Not all brokers offer pre market trading to their clients, so it is important to do your research before choosing a broker. Here are some brokers in the financial industry that allow pre market trading:
- Interactive Brokers
Interactive Brokers is known for its advanced trading platform and offers pre market trading to its clients.
- TD Ameritrade
TD Ameritrade also allows pre market trading, giving investors access to the early morning trading session.
- E*TRADE
E*TRADE is another popular broker that offers pre market trading for those looking to take advantage of early market movements.
How to Start Pre Market Trading
If you are interested in pre market trading, you will first need to open an account with a broker that offers this service. Once you have funded your account, you can place pre market trades through the broker's trading platform.
Keep in mind that pre market trading comes with its own risks, including lower liquidity and potentially higher volatility. It is important to have a solid trading plan in place before engaging in pre market trading to minimize these risks.
In conclusion, pre market trading can be a useful tool for investors looking to get ahead of the market. By choosing a broker that allows pre market trading and understanding the risks involved, you can take advantage of early morning trading opportunities and potentially enhance your investment returns.
