Stock Market Trading Hours: When is the Stock Market Actually Open?

   Stock Market Trading Hours: When is the Stock Market Actually Open?

One of the more frequent questions asked by new investors after they have opened up their first brokerage accounts is when does the actual stock market open. Although the market does have regular hours, which we will get to in a moment, the stock market (at least the large ones) do not actually ever stop trading when the exchanges close as there are after-hours and before-hours trading too.

Although the answer is not as straightforward as most would hope, regular trading hours for the U.S. Stock Market, including the New York Stock Exchange (NYSE) and the Nasdaq Stock Market (Nasdaq), are from 9:30am to 4:00pm Eastern time from Monday-Friday other than on market holidays (think President’s day, Christmas, Easter and the 4th of July). As for the Canadian Stock Markets, which include The Toronto Stock Exchange (TSX) and the TSX Venture Exchange (TSXV), have the exact same trading hours as their American counterparts. The only difference are the holidays as the Canadian stock market is open on July 4th (Independence Day in the US) and closed on July 1st (Canada Day). Usually what will happen is that the day before or the day after a market holiday, regular stock trading will end at 1:00pm to allow those who work in this industry to go home and have enough time to prepare for the holiday.

With all that being said, it is important to note that trading can and does occur outside of these normal stock market hours (9:30am to 4:00pm). For instance, on a regular day throughout the year, there is what we refer to as “pre-market” trading. Pre-market trading tends to occur as early as 4:00am and can go through until the market opens at 9:30am. Similar to this, there are also “after-hours” trading that typically go from 4:00pm to 8:00pm. The main difference between pre-market and after-hours trading compared to the regular trading hours is that these trades are performed through an ECN (Electronic Communications Network) which basically pairs buyers and sellers together directly rather than using a middleman. Usually, when you are buying or selling during normal hours, you are able to get matched up with other investors and the exchange can occur quickly at the market price rather than during after-hours where the price difference between a buyer and seller might cause a large enough difference that the trade does not occur. To better explain this difference, we will use an example. Let us assume that you as an individual want to buy some shares of Company A. During normal market hours you would put in a buy order in the market and someone who would be willing to sell Company A shares would be matched to you at the given market price. The deal would occur, and you would trade your money (held in your brokerage account) to the seller in exchange for the Company A shares which would then be added to your brokerage account. Very simple transaction and everyone gets what they want at the price that they want. During pre-market hours or after-hours trading, there are a lot less buyers and sellers in the market and this causes a liquidity crisis where you might be willing to buy Company A shares for less than what someone might be willing to sell them for and this leads to a situation where the trade is not made as there are simply not enough players in the game. In some cases, there might not even be a buyer or seller depending on the company and/or price. If there is no seller than you would be unable to purchase these shares and you would have to wait until the regular trading hours to find a seller at the price that you want.

So now that we have covered the stock market trading hours during the week, what about the weekend? The easy answer is that there are no regular trading hours for stocks on Saturdays and Sundays. At the end of the day, most new investors will stick to regular stock market hours as they provide more liquidity (meaning there are more investors willing to trade) and regular market hours also provide current information throughout the day of trading rather than after-hours where information is not readily available and you are making money decisions without all the information available to you. Although there are some benefits to pre-market trading and/or after-hours trading, if you are just starting your investing career, stick with the regular market hours, millionaires are made through years of proper investing and not from get rich-quick schemes.

Good luck investing!

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