The US stock markets consist of the New York Stock Exchange, NASDAQ, American Stock Exchange and Over The Counter (OTC) markets. The markets are open for all trading each Monday through Friday at 9:30 a.m. Eastern Time. The markets remain open until 4 p.m. Eastern Time. There is no lunch break, trading remains open the entire time.
Placing Stock Orders Before the Open
Investors can place orders to buy or sell a stock when the market is open. The order will be executed immediately, or when the conditions are met, if it is a conditional order such as a stop or limit order.
Investors can also place an order for the regular trading session before the market opens. If the trader does not specify that the order is to be executed during the pre-market session, the order will be placed to execute in the regular session. In this case, a market order placed before the exchange opens will be executed at 9:30 ET. Limit orders will be executed as soon after the open as the conditions are met.
Orders placed before the open are often at a disadvantage. When the market opens, brokers attempt to fill all orders that have been waiting. If there are many buy orders, a trader may end up paying a higher price than he had planned.
For people who work regular 9 to 5 jobs, living on the west coast can actually be an advantage. They do not have to put in orders before the open, but can wait to see what direction the market takes. Those on the east coast will have to put in their orders before leaving for work, and things could change before the trading day begins.
Placing Orders in the Extended Trading Session
The major exchanges also offer extended trading sessions, which can be accessed through major brokers, including Charles Schwab, source of the information for this article. The pre-market session begins at 8:00 a.m. and ends at 9:25 a.m. The after hours trading session begins at 4:15 p.m. and ends at 8:00 p.m. (all times Eastern.)
Extended trading sessions act in a similar manner to the regular trading session, except that many brokers only allow limit trades during this time. Investors should be very careful during these sessions, since there is less volume, and if fewer are people are trading it is likely the price will not be as good as it would be if there were more buyers and sellers to choose from.
Investors who are not comfortable dealing with buying and selling of individual stocks can purchase mutual funds. Mutual funds are priced once a day after the market closes. Orders placed any time during the day receive the closing price.