How to Make Money in Pre-Market Stock Trading
Pre-market trading is the period in time (from 7 a.m. to 9:30 a.m. EST) where traders can buy and sell stock on the market before the market actually opens. This is considered a very risky time to trade because there is a lot of volatility, but not a lot of volume changes. Making money, though, is possible if you develop a successful strategy.
Other People Are Reading
Instructions
-
Pre-Market Trading
-
1
Pay close attention to any news that comes out from a business overnight. An arbitrary company might say, overnight, that they've reached an agreement with another company which will increase their profits. This is a stock that, when the market opens, is going to rise up.
-
2
When 7a.m. appears, purchase the stock at the current price. What this does is gets you shares of the stock before the general public can get there. When the bell rings to mark the opening of the stock market, people will be rushing to purchase the stock which will send the cost of the shares up.
-
-
3
Determine a sell off point based on percents. If you decide that you want the stock to increase by 5 percent before selling, wait until it reaches that and then sell it. Don't go longer and try and make more money; find your percent and stick with it. This makes the stock market a business and not a gambling racket. Many investors make the mistake of saying, "but it could go a little higher." Even if it goes higher, rest easy knowing that it could have gone much lower.
-
4
Sell the stock, hopefully at a profit. You've purchased the stock at one cost and because this news is available, the cost per share should rise relatively quickly and therefore, result in more money in your pocket. You're getting in ahead of the rest of the crowd, so you've got a chance at making a killer profit.
-
5
Stay away from the stock if it appears many people are investing in the same stock. The ultimate goal is to get ahead of other investors in pre-market stock trading. If everyone is trying to get in on the stock, there won't be much of a change when the market opens and it won't be worth the risk.
-
1
Tips & Warnings
Only jump into pre-market trading if you're willing to take the risk. Trading on the stock market is risky; doing pre-market trading is even riskier.
You need to have a margin account with level 2 quotes and ECNs.
