Any trading session that takes place before the actual trading timings is referred to as pre-market trading. It usually occurs between 08:00 am to 09:30 am. This method is used by people who want to analyze the potency and how the dealing of the market will take place. During weekdays, the pre-market trading may begin from as early as 04:00 am. The actual benefit of pre-market trading can be realized after 08:00 am only.
Here are some risks associated with this trading-
- The choice of quotes often disappears. One cannot watch or act ahead of quotes.
- Execution of various trades becomes difficult as liquidity decreases.
- The prices become volatile and variable as compared to the regular trading hours.
- Technical errors and delays are very common in this business.
Benefits of pre-market trading sessions-
- Some important announcements are made before or after normal trading hours. This helps the trader to analyze the trading trends.
- Economic indicators are usually released during these hours mostly at around 08:30 am which have the potential to give uplifts to the investors.
It is not actually recommended to trade in such sessions just by looking at the few benefits they offer. For an average trader who wants usual and general gains, they should most probably trade during the regular trading hours. A person has to deal with delays, restrictions, and volatility while doing pre-market trading. Doing research can help them to decide whether pre-market trading is right for them or not. It is generally a matter of chance but if done properly, may give some fine advantage to the stock aspirant.
Stocks to trade in pre-market sessions
- Melinta Therapeutics, Inc. (NASDAQ: MLNT)
This is a healthcare pharmaceutical company that has its headquarters in New Haven, Connecticut, United States. It develops various drugs effective against several infections. It was established in the year 2000. Some of its agreements have been certified by the deals made with Yale University, Medical Research Council, Wakunaga Pharmaceutical Co., Ltd. and also with CyDex Pharmaceuticals, Inc.
- MoneyGram International, Inc. (NASDAQ: MGI)
This financial services company was set-up in 1940 with its headquarters in Dallas, Texas, United States. The company functions via two business units, i.e. Global Funds Transfer and Financial Paper Products. The company deals in the provision of money transfer services in the United States and worldwide. The Global Funds Transfer provides the services of the company to the unbanked or under-banked customers and the Financial Paper Products offers these services to the customers via agents and financial institutions. Both these segments of the company work under the name of the company itself.
- Calithera Biosciences, Inc. (NASDAQ: CALA)
Calithera Biosciences is a biotech company founded in the year 2010 and its headquarters are located in South San Francisco, California, United States. The company focuses on the development of drugs that can be effectual and of good use when it comes to cancer treatment. The company centers on developing small molecule drugs which can work against tumor metabolism and tumor immunology, both of which eventually target the cancer treatment.
These few companies are considered fair enough for trading in the pre-market sessions and with thorough awareness on can succeed in this business finely.