- In the US, the New York Stock Exchange and the Nasdaq are open weekdays from 9:30 a.m. to 4 p.m. EST.
- Extended-hours trading is available to both retail and institutional investors via electronic communications networks.
- Trading outside of normal hours comes with risks, including price uncertainty, less liquidity and higher volatility.
- Visit Business Insider’s Investing Reference library for more stories.
If regular trading hours on Wall Street run from 9:30 a.m. to 4 p.m., shouldn’t we stop hearing about market hikes and dives by dinner time?
Well, stock market hours aren’t that simple. Trading doesn’t stop when markets close, and it doesn’t necessarily start when they open either, thanks to pre-market and after-hours trading.
Trading outside of normal hours isn’t new, but it’s become more accessible for retail traders due to the rise of electronic communications networks, or ECNs. These digital systems facilitate trading beyond traditional hours, connecting buyers and sellers directly without an intermediary.
However, just because extended-hours trading is an option doesn’t necessarily mean it’s one you should take. Trading outside of regular hours comes with risks like less liquidity and higher prices.
What time does the stock market open?
The two major US exchanges are the New York Stock Exchange (NYSE) and the Nasdaq. They are both based in New York and are open Monday through Friday from 9:30 a.m. to 4 p.m. EST.
Beyond regular trading hours, stock markets close for only nine federal holidays. On early-closure days, typically the days preceding and following a market holiday, regular trading ends at 1 p.m.
You may think trading stops outside of normal stock market hours, but there’s more to the story. Most stock futures, which are contracts traders use to speculate an underlying asset’s price and trade in the direction of that index, start trading at 6 p.m. EST on Sundays. This is why it’s not unusual to see a stock-market-related headline over the weekend.
Stock market trading hours around the world
For individuals who wish to invest in international exchanges, that’s an option, but time disparities can present a challenge. Many international exchanges have the same hours in local time as those of the US. And although traders can place orders before opening, the trades have to be executed during the hours in which that market operates.
Here are the regular trading hours for some of the biggest stock exchanges in the world:
- Canada: The Toronto Stock Exchange has a market capitalization of $2.1 trillion and operates from 9:30 a.m. to 4:00 p.m. EST.
- China: The Shanghai Stock Exchange has a market capitalization of $4.9 trillion and operates locally from 9:30 a.m. to 3 p.m., or 9:30 p.m. to 3 a.m. EST.
- Hong Kong: The Hong Kong Stock Exchange has a market capitalization of $4.4 trillion and operates locally from 9:30 a.m. to 4 p.m., or 9:30 p.m. to 4 a.m. EST.
- India: The Bombay Stock Exchange has a market capitalization of $1.7 trillion and operates locally from 9 a.m. to 4 p.m., or 11:30 p.m. to 6:30 a.m. EST.
- Japan: The Tokyo Stock Exchange is the largest Japanese exchange and the second largest globally, with a market capitalization of $5.7 trillion. It operates locally from 9 a.m. to 3 p.m., or 8 p.m. to 2 a.m. EST.
- Netherlands: Euronext is based in the Netherlands and is the largest stock exchange in Europe, with a market capitalization of 3.9 trillion. It operates locally from 8 a.m. to 4:40 p.m., or 2 a.m. to 10:40 a.m. EST.
- United Kingdom: The London Stock Exchange considers itself the most international global exchange, featuring more than 3,000 listings and a market capitalization of $3.2 trillion. It operates locally from 8 a.m. to 4:30 p.m., or 3 a.m. to 11:30 a.m. EST.
Investing through foreign exchanges can be done by setting up an international account through most major stock brokerages, but individuals should consider the complexities of foreign currency exchange, as well as the tax implications of trading globally before opting to go this route.
What is extended-hours trading?
Extended trading occurs when the market closes and an investor buys or sells a security outside of regular trading hours.
Extended-hours trading is performed via electronic communications networks, and includes both pre-market and after-hours trading. However, volume on these trades is limited since there are fewer participants.
Investors typically seek to trade outside of normal hours when major news, like an earnings release, inspires them to buy or sell, but comes after the exchange has closed or before it opens.
After-hours trading can be a strong indicator of which direction the market will open, and it should be noted that most extended-hour trades happen close to normal trading hours, since relevant news is usually released either right before markets open or soon after they close.
The three stock trading sessions
- Pre-market: Runs from as early as 4 a.m. to market open at 9:30 a.m. EST.
- Regular market hours: Spans from 9:30 a.m. to 4 p.m.
- After-hours: Begins at 4 p.m. and can run until 8 p.m. EST, but trading volume tends to slow down considerably by around 6pm.
Risks of extended trading
Though extended trading allows investors to act fast and beat the rest of the market, it comes with some risks to be aware of.
- Less liquidity: Extended-hours trading has lower trading volume than traditional hours, and some stocks can’t be traded at all outside of traditional hours. This makes it harder to execute trades and causes lower liquidity.
- Higher volatility: Due to lower trading volume, trades during extended hours often come with larger spreads, or differences between an equity’s bid and ask price. This can make it harder for investors to carry out transactions at the desired price and can facilitate drastic price movements.
- Price uncertainty: In the same vein as above, high volatility makes it harder to predict a stock’s price outside of traditional trading hours, and an equity’s price during extended hours doesn’t always closely align with its price during normal trading hours.
Where there’s risk, there’s room for reward. Trading outside of normal hours comes with the major perk of allowing investors to react to news, like poor earnings, immediately after it’s announced instead of having to wait for an exchange to open, by which time a stock’s price may already have dropped drastically.
The financial takeaway
The main US stock exchanges – the NYSE and the Nasdaq – are open from 9:30 a.m. to 4 p.m on weekdays, but individuals can trade outside of these hours, too. Extended-hours trading allows investors to act fast following news that might affect a stock’s price.
Trading beyond normal hours can be risky, since stocks are less liquid and more volatile, but can also be worth it.
Business Insider Emails & Alerts
Site highlights each day to your inbox.