City Index clients will be able to trade US equities in the pre and post-markets through either CFD trading or financial spread bets, and they can take long or short positions just as they can in the regular session.
Clients can find the extended-hours equities by logging on to their web trader or mobile dealing app searching for a ticker such as BAC (Bank of America) and selecting the extended hours label.
Pre-market trading takes place before the regular session in New York, the pre-market starts trading at 4.00 Eastern time which is 8.00 a.m. GMT.
The post-market session takes place after the regular session closes in New York at 4.00 p.m. Eastern time and runs until 8.00 p.m. Eastern time which is midnight GMT.
Why trade pre and post-market?
Being able to trade pre and post-market allows clients to take a position in a stock, as and when news breaks or new information comes to light, outside of regular trading hours.
That’s particularly relevant during quarterly earnings with most firms reporting prior to or after the close of the regular equity trading session.
The extended sessions allows clients to take a view and potentially pre-empt price changes in the regular session, without having to wait for the opening bell.
Pre and post-market trading is increasingly setting the trend for price discovery in US markets. Traders in the regular session often take their lead from pre and post-market moves.
A word of caution – less liquidity
That said the extended sessions are unlikely to be as liquid as regular trading which means prices/spreads may be wider and it may be harder to enter or exit larger positions, without incurring slippage, and that’s something that traders in the pre and post-markets need to take into account.
City Index is the second broker that has recently added extended trading hours to its list of services. Back in July, we wrote about the introduction after-hours trading from the social trading platform eToro and no doubt other brokers will soon be offering pre and post-market trading of US equities.
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