Sean, I am trying to understand pre-market trading. Is this trading going on in foreign exchanges…

Sean, I am trying to understand pre-market trading. Is this trading going on in foreign exchanges or something? My broker tells me I can't buy a stock until the markets open. I often see a stock showing down in pre-market and then be up when the markets open. I just wonder who is doing the trading before the markets open? Thanks Sean.

There are brokers that you can trade in the pre-markets with and ones you can't. However, in investing you never have to worry about pre-market "trading" and after-market "trading" because it really is trading and not investing. But with that said, part of it is movement in the S&P futures markets that is open before the NYSE and NASDAQ, etc. Part of it is actual institutional trading before the market opens. Also, you have to know that trading during those times can be very illiquid as well. So it's not something I'd suggest. And it's not going to give a true investor an edge. It's why you don't hear Buffett talking about pre-market trading and after-market trading. But anyway, I hope that helps to explain it a bit better. Being able to trade pre- and post- market doesn't necessarily give you an edge. You can lose money in those times just like in other times.

Trading is tough. All of the odds are stacked against you. Investing, however, anyone can do with a system that they stick to and with faith and patience along the way.

Sorry, I didn't make myself clear. have no interest in trading at all. I can't find the message but I thought you said IBM is up 4.4% in premarket a couple of days ago after they reported earnings. You answered the question, its futures trading and institutional trading before the market opens. Thanks Sean

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Yes, IBM shot up in after-market trading and that continued on into the next pre-market session which caused a huge "gap up" on the chart the next trading session.

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