Page 346 - THE MARKET WHISPERER

342 PART 10 - Winning Trades

Pre- and Post-Market Trading

Wall Street is open to regular trading for six-and-a-half hours, between
9:30 am to 4 pm in New York (EST). These are busy hours which start and
end with the ring of the bell, but these are not the only hours of activity. In
addition, it is possible to trade during periods of minimal activity before
and afterthe official trading hours.

Some brokers allow their clients the opportunity to utilize pre-market
and post-market trading. The NASDAQ stock exchange, for example, allows
trading in stocks from 4 am and until 8 pm, New York time. It is probable,
however, that your broker does not provide services at 4 am. You need to
check pre- and post-market trading times with your broker. While they
will differ from one broker to the next, the usual timeframe is two hours
each way beyond the formal trading day. These extra hours are set by the
exchanges as an opportunity for those that wish to be able to exit and enter
stocks due to news outside of market hours.

Why would we want to join pre- or post-market trading? For the
greater majority of stocks, no major volume changes are noted during
these hours. By contrast, when well-known companies publicize quarterly
reports or convey important information outside of normal trading hours,
their stocks will show lively activity. This means that you, too, can join
the pre- or post-market trading. The theoretical advantage is that you can
be among the first reacting to financial announcements, long before the
general public reacts. In actuality, if you wish to listen to my advice, keep
a safe distance. I strongly recommend that you never trade out of regular
hours. I can pretty much promise you that in the long run if you ignore this
advice, you will lose far more than you will make.

The Dangers of Pre- and Post-Market Trading
1. Low volume: Unlike during regular trading hours, there are very few

active buyers and sellers during pre- and post-market timeframes. This
means that you might not obtain the shares you want, or find a buyer
for shares you wish to sell.
2. Wide spreads: Due to the low volume, spreads between the ask and bid
tend to be wide. This means that at the moment of purchase, you have