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Pre-Market and After-Hours Trading: What Investors Should Know
By Hiren Amin, Read bio | Updated on July 31, 2026
Summary
Pre-market and after-hours, collectively knowns as extended-hours trading, lets investors trading let investors buy and sell certain securities outside regular market hours. While extended-hours trading can offer more flexibility and a chance to react to news outside of the normal trading session, it can also come with lower liquidity, wider spreads, higher volatility and order restrictions.
Table of Contents
- Pre-Market and After-Hours Trading: What Investors Should Know
- What is pre-market and after-hours trading?
- How it works
- What are the pre-market trading hours?
- Accessing extended hours market data
- Why investors engage in pre-market and after-hours trading
- Risks associated with pre-market and after-hours trading
- FAQs
Did you know some securities can be traded outside regular market hours? With extended-hours trading, self-directed investors may be able to place trades before markets open or after they close. This can offer more flexibility, but it also comes with added risks, including lower liquidity, wider spreads and greater price uncertainty.
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What is pre-market and after-hours trading?
As an investor, it's helpful to know that most stock exchanges in North America are typically open for 5-7 hours on weekdays. The Toronto Stock Exchange (TSX), New York Stock Exchange (NYSE), and Nasdaq (NASDAQ) all share the same regular trading hours – between 9:30 a.m. and 4 p.m. ET, Monday to Friday, although holiday schedules can differ by exchange.
The economy, however, is not bound by these hours and important market shifts can occur at any time. This factor and advancements in electronic trading have encouraged markets to enable trading beyond regular hours.
Trading outside regular hours is called extended hours trading. It consists of two sessions:
Pre-market trading usually takes place between 8 a.m. and 9:20 a.m. ET on weekdays (U.S. only).
After-hours trading hours can vary depending upon the brokerage. Typically, it starts at 4 p.m. and runs as late as 8 p.m. ET on weekdays (U.S. only). However, some brokerages may allow clients to execute trades only till 7p.m. ET or even later than 8 p.m. ET.
Extended-hours trading, in human terms
Think of regular market hours like a busy store during the day. There are more buyers, more sellers and usually more activity. Extended-hours trading is more like shopping before the store fully opens or after most people have left. You may still be able to buy or sell, but there may be fewer people on the other side of the trade. That can make prices move more quickly and make it harder for your order to be filled at the price you want.
How it works
Regular trading hours tend to have more market participants, which can mean higher trading volume, better liquidity and narrower bid-ask spreads. During pre-market and after-hours sessions, there are usually fewer buyers and sellers. That can make it harder to complete a trade, and prices may move more sharply.
Extended-hours trading may also have different rules depending on the market, security and brokerage platform. For example, some brokerages only allow limit orders during these sessions.
What are the pre-market trading hours?
Any trading activity that occurs before markets open is known as pre-market. While the TSX does not offer pre-market trading, the NYSE and NASDAQ do. It usually takes place between 8 a.m. and 9:20 a.m. ET on weekdays, but many discount brokers facilitate access to NYSE and NASDAQ pre-market trading as early as 4 a.m. ET.
What are the after-market hours?
After-hours trading, as the name suggests, takes place after the markets close. For U.S. stock markets, after-hours trading starts at 4 p.m. and can run as late as 8 p.m. ET. On the TSX, the post-trading session runs from 4:15 p.m. to 5 p.m. ET.
Accessing extended hours market data
If you have a brokerage account, you can use its information services to access detailed after-hours market trading data. Some brokerage platforms provide access to extended-hours market data, though availability, real-time access and any related fees can vary by provider, data package and platform.
For example, with TD Direct Investing you can enter pre-market or after-hour orders online using WebBroker or Advanced Dashboard for eligible securities.
If you don't have a brokerage account, there are several sites that offer free access to pre-market and after-hours data.
Why investors engage in pre-market and after-hours trading
Some investors use extended-hours trading to react to news that happens outside regular market hours, such as earnings reports, economic updates or developments in overseas markets. For example, if a company releases stronger-than-expected earnings after the market closes, some investors may want to act before the next trading day begins.
That flexibility can be useful, but it is important to understand the risks before trading outside regular hours.
Take Note
Extended-hours trading can give investors more flexibility, but it is not the same as trading during regular market hours. Fewer participants may mean lower liquidity, wider bid-ask spreads and more price movement. Before placing an order, make sure you understand the risks, rules and order types available through your brokerage.
Risks associated with pre-market and after-hours trading
Liquidity: If there are a large number of orders in the market, the liquidity of a security is considered to be high. However, with very low levels of liquidity during pre-market and after-market hours, there is no guarantee that a certain trade will be executed. The risk is that your order may be partially executed or not executed at all.
Volatility: Change in the price of a security during trading hours is known as volatility. Due to a smaller number of participants in extended hours, trading can be volatile and result in price swings.
The spread: This refers to the measurable difference in price between what a security can be bought and sold for. With lower liquidity and higher volatility, the spread may be wider during pre-market and post-market hours.
Availability: During pre-market and after-hours trading, not all stocks are available to trade. Plus, only limit orders are available to investors during these extended hours.
Certain institutional and major investors may choose to simply refrain from pre-market and after-market trading, regardless of market shifts or events. Due to this, it's possible for a stock's price to fall sharply during extended hours trading only to rise when the markets open the following day.
How to trade in pre-market and after-market hours
The procedure is quite similar to trading during regular hours. Simply log into your online brokerage account and select the stock, or stocks, that you wish to trade. The key difference is that instead of placing a market order, you will have to place a limit order. Keep in mind that the bid-ask spread may be wider than it is during regular hours and the stock price may be volatile as well. Additionally, you will have to take into account the different rules that various brokerages have when it comes to trading hours.
FAQs
Is after-hours trading a good idea?
After-hours trading offers the convenience of trading outside regular market hours and the ability to react to news events, but it comes with risks like lower liquidity, higher volatility, and order restrictions. These factors can lead to larger bid-ask spreads and less favorable prices. Whether it's a good idea depends on your individual circumstances, risk tolerance, and trading strategy. It's crucial to stay informed and vigilant.
Does after-hours trading affect a stock's opening price?
Yes, after-hours trading can influence a stock's opening price due to reactions to news and events that happen when the market is closed. This period tends to be more volatile and lacks liquidity, leading to larger price swings based on lower trading volumes. Moreover, significant extended-hours trading can set the tone for the stock's opening price, reflecting investor sentiment and expectations.
Are pre-market prices accurate?
Pre-market prices can give an indication of market sentiment and a stock’s opening price, but are not intended to be a predictor of regular trading prices due to limited liquidity, higher volatility, and the influence of new announcements. These factors can cause significant price swings and discrepancies between pre-market and regular trading hours, so it's important to interpret pre-market prices with caution.
Who can buy in after-hours trading?
After-hours trading is open to both institutional and retail investors. Hence, it is available to you as long as your brokerage provides access.
Can I place market orders during extended-hours trading?
In many cases, extended-hours trading is limited to certain order types, such as limit orders. This helps investors set the maximum price they are willing to pay or the minimum price they are willing to accept, which can be important when prices are moving quickly.
Why are spreads wider after hours?
Spreads may be wider because there are often fewer buyers and sellers trading outside regular market hours. With less activity, the difference between the bid price and ask price can increase.
Is pre-market trading riskier than regular-hours trading?
It can be. Pre-market trading may involve lower liquidity, more volatility and fewer available quotes, which can make prices less predictable.
Conclusion
Pre-market and after-hours trading can give self-directed investors more flexibility and a way to respond to market news outside regular trading hours. But that flexibility comes with trade-offs, including lower liquidity, wider spreads, greater volatility and order restrictions. Before trading outside regular hours, make sure you understand how it works, what risks are involved and whether it fits your investing strategy.
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The information contained herein has been provided by TD Direct Investing and is for information purposes only. The information has been drawn from sources believed to be reliable. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual's objectives and risk tolerance.
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