How to Place a Pre-Market Order

Pre-market trading takes place before the regular market opens at 9.30 am Eastern time. Most broker trading platforms let you participate in pre-market trading. Your order must be placed during pre-market trading and clearly marked “pre-market,” otherwise it will be accepted as a regular order and executed during regular trading hours.

Step 1

Check the pre-market prices of the actual trades going through to get an idea of where stocks are trading.

Step 2

Decide on the price at which you want to buy or sell. Only limit orders are accepted pre-market. If your limit price is outside the trading range, your order will not be executed. Stocks are quoted bid and ask. Bid is the highest price at which you can sell, ask is the lowest price at which you can buy. If you want your trade to go through right away, set your sell price at the bid or your buy price at the ask.

Step 3

Enter the limit price and number of shares. Mark your order “pre-market” and click buy or sell, as the case may be.

Step 4

Watch the reported trades and look for your trade confirmation. Your order may or may not be executed, or may be partially executed, depending on how many orders are ahead of yours, whether there are traders willing to take the other side of your transaction, and how fast prices are moving.

Step 5

Adjust your limit price if your order is not executed and the price moves away from you. In a fast moving market you might have to adjust your price several times before your order is executed.

Tip

  • If you’ve never placed a pre-market order before, ask your broker to walk you through the procedure or at least watch pre-market trading to get a good feel for how things work before entering actual trades.
  • If you want to get a better price, try to set your sell limit slightly above the current bid or your buy limit slightly below the current ask. Just remember that if you get no takers your order won’t be executed.

Warning

  • Pre-market trading can be volatile. You should have a solid reason why you can’t wait for the opening.

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