I remember during the first months when I first started trading stocks, I woke up one day and logged in to my account on my broker’s website, and I saw that C was so delicious at around $3.80 (that was before they did the reverse split). I placed the order at around 8:00 AM, but the order was not filled immediately. I waited for 1 minute, 5 minutes, 10 minutes, and the order was still not yet filled. What made me angry was that the price of C was increasing every second, and my order is still not filled (yet I know that C is a very liquid stock, and that its fill time is way above the average fill time).
I eventually called. The adviser on the other end told me that my order cannot be filled because the market is still not open yet. So I asked, how on earth was I allowed to make the order while the market is still not open, and why is C’s price moving. He told me that this is the pre-market, and during the pre-market investors start taking their positions with respect to stocks. So investors buy/sell stocks while knowing that their orders won’t be processed until the market is open. Investors do so because of news about the stock, or because they believe that the stock is going to take a certain direction once the market is open.
In any case, and if you didn’t notice, there are some stocks that are tradeable in the pre-market while some are not (I will probably write about this in a future post) and for these stocks that are tradeable in the pre-market, you can start seeing the “pre-market” tag on their page on Google finance as of 7 AM EST. Which means that the pre-market trading begins at exactly 7 AM Eastern Standard Time.
I hope this post was of help to someone somewhere!