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From what I understand pre-market and post market trading is basically an extension to regular hours trading.

How does it compare in terms of buying stocks? What I mean is if I order a stock at 10:30am and the price at that time is $10 then I buy that stock for $10.

For pre market are you buying stocks in real time, or are you just pre-ordering and then your order executes when the market opens?

For example, if a stock is worth $5 before the market opens and I put an order in do I buy at the price at 8am or the price at the open?

thank you.

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First of all, not all brokers allow trading during pre-market and post-market. Some brokers only allow trading during the regular hours (9:30am - 4pm ET).

Second of all, while you can place orders using limit orders and market orders during regular trading hours, you can only use limit orders during pre-market and post-market. This is because the liquidity is much lower during pre-market and post-market, and using market orders could result in some trades filling at horrible prices. So brokers don't allow using market orders outside of regular trading hours.

Third, some brokers require you to specify that you want your order to be executed during pre-market or post-market. For example, my broker allows me to specify either "Day" or "Ext" for my orders. "Day" means I want my order to execute only during regular trading hours, and "Ext" means I want my order to execute at any time - pre-market, regular trading hours, or post-market.

Finally, if your broker allows pre/post market trading, and you place a limit order while specifying "Ext", then your trade can happen in real-time during pre-market or post-market. Per your example, if a stock is trading at $5 at 8am, and you put in a limit order (while specifying "Ext") to buy it at $5 at 8am, then your order will execute at that time and you will buy that stock at 8am.

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  • ive seen lots of people mention how pre and post market trading is very low volume, on one hand the reasons why are obvious but at the same time, i would expect more people to be using it. correct me if i'm wrong but don't most quarterly reviews and company info get released during pre and post market hours, so would it not make sense that investors try to buy or sell at those times to get ahead of the curve whether it an up or down swing.
    – Mustard Tiger
    Feb 16, 2015 at 20:48
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    @abcla Usually volume is lower in pre/post market, but you're right, if company news is released during that time, then volume will be much higher. As for whether you can get ahead of the curve by buying/selling during pre/post market, that is tricky. Sometimes a big move is made in one direction during the pre-market, but then when regular trading hours begin, the stock might move completely in the opposite direction.
    – 7529
    Feb 16, 2015 at 20:52
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Normal hours for the NYSE and Nasdaq is from 9:30 am to 4 pm ET.

After hours trading rules varies from broker to broker:

  • Some limit the time period for after hours trading
  • Some charge additional fees
  • Order types allowed varies. Stop orders and more complex orders are not allowed in the after-hours session.

There are two main issues with after hours trading:

  • Bid/Ask spreads are generally wider, often absurdly wide, due to lack of liquidity

  • Volatility is higher due to lower liquidity

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