Trading Hours

Premarket Trading Guide

Master premarket trading - hours, strategies for gappers, risks, and how to capitalize on early opportunities

What is Premarket Trading?

Premarket trading refers to buying and selling securities before the regular market session opens at 9:30 AM ET. During premarket hours, traders can react to overnight news, earnings reports, and global market developments.

Premarket is popular with day traders who want to capitalize on price gaps and high volatility around market-moving news. Many of the biggest intraday moves begin in premarket as early traders position ahead of the opening bell.

However, premarket trading carries unique risks: lower liquidity, wider bid-ask spreads, increased volatility, and the potential for gaps to reverse quickly once regular hours begin. It's an advanced arena that requires specific strategies and risk management.

Premarket Trading Hours

Session	Time (ET)	Duration	Characteristics
Early Premarket	4:00 AM - 7:00 AM	3 hours	Very low volume, wide spreads, institutional only at many brokers
Active Premarket	7:00 AM - 9:30 AM	2.5 hours	Most retail activity, news reactions, better liquidity
Regular Hours	9:30 AM - 4:00 PM	6.5 hours	Highest volume and liquidity, tightest spreads
After Hours	4:00 PM - 8:00 PM	4 hours	Earnings reactions, moderate volume, wider spreads

Note: Available hours vary by broker. Some only offer 7:00 AM - 9:30 AM premarket access. Check your broker's specific hours.

What Can You Trade Premarket?

✅ Trades Premarket

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Stocks: Most stocks trade premarket, but focus on liquid names with news. Low-volume stocks have poor fills.
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ETFs: SPY, QQQ, IWM and other major ETFs trade premarket. Good for market directional plays.
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Futures: ES, NQ, YM trade nearly 24 hours. Actually close 5:00-6:00 PM ET then reopen.
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Forex: Currency pairs trade 24 hours Sunday-Friday. No premarket concept - always open.
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Crypto: Trades 24/7. No premarket. However, crypto stocks (COIN, MARA) do have premarket.

❌ Does NOT Trade Premarket

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Options: Only trade during regular hours 9:30 AM - 4:00 PM ET. Cannot buy/sell options premarket.
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Penny Stocks: Many low-priced stocks don't have premarket activity. Illiquid and untradeable.
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OTC Stocks: Over-the-counter stocks typically don't trade extended hours.
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Some Small ETFs: Niche or low-volume ETFs may not have premarket liquidity.

How to Find Premarket Movers

Sources for Premarket Opportunities

News & Catalysts

• Earnings reports: Pre-market earnings create biggest gaps
• FDA approvals: Biotech catalyst for big moves
• M&A announcements: Acquisition news gaps stocks
• Economic data: CPI, jobs, Fed decisions move markets
• Guidance changes: Revenue/earnings guidance updates

Scanning Tools

• FinViz: Free premarket gappers screener
• TradingView: Premarket screener with volume filter
• Benzinga: Real-time news and premarket movers
• MarketWatch: Premarket most active list
• Your broker: Most have premarket scanner/watchlist

What to Look For

Volume spike - Stock trading 3x+ average premarket volume shows real interest

Clear catalyst - News, earnings, or event driving the move. Random gaps are dangerous

Significant gap - 3%+ gap for stocks, larger for small caps. Small gaps often fade

Liquid stock - Average daily volume 1M+. Low volume stocks have poor premarket execution

Directional momentum - Gap holding or extending, not fading back immediately

Premarket Trading Strategies

Momentum

Gap and Go Strategy

Trade stocks that gap significantly on news and continue moving in gap direction during premarket and into open.

Find strong gapper - Stock gaps 5%+ on positive catalyst (earnings beat, approval, etc.)

Wait for confirmation - Price holds gap level or continues higher in premarket

Enter on pullback or breakout - Buy dip to VWAP or breakout of premarket high

Stop below premarket low - If premarket low breaks, gap might be fading

Target: Extended move - Trail stop as stock runs. Exit if momentum stalls

Fade

Gap Fade Strategy

Trade against weak gaps that are likely to reverse back to previous close or fill the gap.

Identify weak gap - Gap on no news, low volume, or market moving against it

Wait for rejection - Price tries to extend but gets rejected, forms lower high

Enter on confirmation - Short when gap high breaks or clear reversal candle forms

Stop above premarket high - If new highs made, fade failed - exit immediately

Target: Gap fill - Previous day's close is common target for gap fills

Opening Range

First 5 Minutes Strategy

Watch premarket, but wait for market open. Trade the direction of the first 5-minute breakout.

Mark premarket high and low - These become key levels at market open

Watch 9:30-9:35 AM range - First 5 minutes establishes opening range

Enter on breakout - Trade direction of break above/below opening range

Stop on other side of range - If opening high breaks, stop below opening low

Target: Extended move or next level - Previous day high/low, whole numbers, VWAP

Advanced

Relative Strength/Weakness

Compare stock movement to the market (SPY). Trade stocks showing strength or weakness relative to SPY.

Relative Strength: Stock green while SPY is red, or stock +3% while SPY +1% - outperforming

Relative Weakness: Stock red while SPY is green, or stock -3% while SPY -1% - underperforming

Why it works: Relative strength/weakness often continues during regular hours

How to trade: Long relative strength, short relative weakness

Premarket Trading Risks

Understand These Risks Before Trading Premarket

Premarket is significantly riskier than regular hours:

Low liquidity - Fewer participants = harder to get filled, slippage common, large orders move price significantly. Your 1000 share order might not fill or fill at multiple prices.

Wide bid-ask spreads - Spreads can be 5-10x wider than regular hours. A stock with $0.01 spread normally might have $0.10+ premarket. Costs add up fast.

Higher volatility - Thinner order books mean bigger price swings on small volume. +2% gap can become +5% or -1% within minutes on minimal volume.

False moves - Premarket direction often reverses at market open when real liquidity enters. Don't assume premarket trend continues.

Limited order types - Many brokers only allow limit orders premarket. No market orders, no stop losses. Must manually manage positions.

Broker restrictions - Not all brokers offer full premarket hours. Some charge fees. Some require minimum account size. Check terms carefully.

Premarket Order Best Practices

✅ DO This

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Use limit orders: Always. Market orders can fill at terrible prices with wide spreads.
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Check the spread: Look at bid-ask before ordering. Don't cross wide spreads unnecessarily.
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Start small: Trade smaller size premarket than regular hours due to increased risk.
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Watch Level 2: See actual bids and offers. Shows true liquidity and where big orders sit.
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Set alerts: Get filled or partially filled? Set price alert for manual stop management.

❌ DON'T Do This

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Market orders: Recipe for disaster with wide spreads. You'll get killed on slippage.
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Large position size: Liquidity can't handle it. You'll move the price against yourself.
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Chase moves: FOMO into ripping premarket stock. Often reverses at open. Be patient.
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Forget time limit: Premarket orders can execute at regular market open. Use DAY or cancel before 9:30.
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Trade illiquid stocks: If regular volume is low, premarket is dead. Stick to liquid names.

Premarket Trading Best Practices

Prepare the night before - Scan for earnings, news, and events before premarket. Have watchlist ready when premarket opens. Don't scramble at 8 AM.

Focus on 8:00-9:30 AM window - Early premarket (4-7 AM) is too thin. Most retail action and better liquidity comes after 8 AM.

Compare to futures - Check ES/NQ futures for market direction. Individual stock fighting market trend has lower probability.

Use risk management - Smaller position sizes, wider stops to account for volatility, defined max loss per trade.

Don't overtrade - Pick 1-2 best setups. Quality over quantity. Premarket is not meant for 20 trades.

Review and adapt - Keep journal of premarket trades. Which strategies work? Which stocks are tradeable? Learn patterns.

Should You Trade Premarket?

Good Fit For:

✅ Experienced day traders with 6+ months regular hours success
✅ Traders comfortable with limit orders and Level 2
✅ Those who can handle volatility and quick decisions
✅ Traders with real-time news and scanning tools
✅ Those with solid risk management and discipline
✅ Morning people who can wake early and focus

NOT Recommended For:

❌ Complete beginners or those new to day trading
❌ Traders still learning regular hours mechanics
❌ Those with poor risk management or discipline
❌ Emotional traders who chase or panic easily
❌ Traders without proper tools and real-time data
❌ Those with small accounts under $5,000

Bottom line: Master regular hours trading first. Premarket is advanced. Build skills and consistency during 9:30-4:00 before adding premarket complexity.

Frequently Asked Questions

What time does premarket trading start?

Premarket trading typically starts at 4:00 AM ET and runs until 9:30 AM ET market open. Some brokers offer access starting at 4:00 AM, while others begin at 7:00 AM or 8:00 AM. Check with your specific broker for their premarket hours.

Can you buy stocks in premarket?

Yes, you can buy and sell stocks during premarket hours if your broker offers extended hours trading. Most major brokers allow premarket trading, but you may need to enable it in your account settings and use limit orders.

Is premarket trading risky?

Premarket trading is riskier than regular hours due to lower liquidity, wider spreads, higher volatility, and potential for false moves. Gaps can reverse quickly at market open. Only experienced traders should trade premarket with proper risk management.

What instruments trade premarket?

Stocks, ETFs, and some ADRs trade premarket. Futures trade 23 hours a day. Forex trades 24/5. Options do not trade premarket. Not all stocks have premarket activity - focus on liquid, high-volume stocks with news.

Do I need a special account for premarket trading?

Most brokers allow premarket trading but require you to enable extended hours trading in account settings and sign an agreement acknowledging the risks. You typically need a margin account, though some brokers allow cash accounts.

Information accurate as of December 2025. Verify current rates and terms with providers directly.

Last updated: December 2025