What is premarket trading?

Premarket trading is a fairly new development. In 1991, the NYSE responded to around-the-clock global trading by allowing trading after regular market hours. Since then, computerized has become increasingly common and the exchanges have extended trading beyond market hours.

How do I place a premarket order?

To place premarket orders, investors first need access to a brokerage account. These days, many online brokers offer premarket trading. If you are new to stock trading, you can select and open an account with a brokerage that provides low-cost or free market research and premarket trading.

Are premarket prices volatile?

You should keep in mind that prices can be far more volatile than usual in premarket trading. Limited volume can make them rise and fall more rapidly and steeply than usual. And traders used to more moderate trading could take significant losses from rapid premarket price changes.

What does a limited trading volume in the pre-market mean?

The limited trading volume in the pre-market may provide a signal of weakness or strength that may not be borne out when the market opens and regular trading volumes are reached. For example, a stock that reports an earnings miss may be down significantly in pre-market trading but could reverse course and end the day higher in the regular session.