Pre-market trading refers to trading with abnormal opening time. Trading before opening is called trading before closing, and trading after closing is called trading after closing. In the United States, the new york Stock Exchange and Nasdaq have special trading hours before and after the market.
Generally speaking, the trading volume before and after the US stock market is not very high, the liquidity is not strong, and the trading spread is relatively large, which is equivalent to the continuation of the trading on the same day and will affect the opening price of the next trading day.
Secondly, abnormal opening hours can also be used for pre-market trading. In addition to normal trading hours, US stocks are also allowed to trade before and after hours. Most securities companies in the United States are allowed to trade before and after the market, but a few securities companies are not allowed or need to manually entrust pre-market trading. It is not stocks that are traded in the early stage, but futures. Do not generalize.
In the early market, it is very important to consider liquidity and anchor price. There is no reliable anchor price, and the trading risk is high, especially for stocks with low liquidity. Therefore, the liquidity and price anchor related to market index and crude oil anchor the traded futures price.
If the pre-market liquidity is insufficient and retail investors dominate the market, then on this special day, its volatility is more considerable than the official time, so we should maintain a positive view.