In the U.S. stock markets, extended hours trading occurs outside the standard trading session, which runs from 9:30 AM to 4:00 PM Eastern Time (ET) on regular trading days. Extended hours trading is split into two main periods:
Pre-Market Trading: This occurs from 4:00 AM to 9:30 AM ET. During this time, investors can place trades and react to news that may have come out before the regular trading session begins.
After-Hours Trading: This takes place from 4:00 PM to 8:00 PM ET. This session allows investors to trade after the regular market close, which can be useful for reacting to after-hours news and earnings reports.
Not all stocks or securities may be available for trading during these extended hours, and trading volumes can be lower, leading to potentially higher volatility and wider spreads between bid and ask prices.