Market hours define the specific times when financial markets are open for trading. These hours vary based on the type of asset being traded (stocks, forex, cryptocurrencies) and the location of the exchange. Understanding market hours is crucial for traders as they help determine when to enter or exit trades based on liquidity, volatility, and trading conditions.
For stock markets, the trading hours typically extend from Monday to Friday, with breaks or specific hours for different exchanges. Here’s an example of the New York Stock Exchange (NYSE) trading hours:
Regular Trading Hours: 9:30 AM to 4:00 PM Eastern Time (ET)
Pre-Market Trading: 4:00 AM to 9:30 AM ET
After-Hours Trading: 4:00 PM to 8:00 PM ET
Pre-market and after-hours trading allow investors to react to news and earnings reports outside regular hours. However, these sessions tend to have lower trading volume and higher volatility.
The forex market operates 24 hours a day, five days a week. This continuous availability is due to the overlap of trading sessions in major financial hubs around the world. Here’s an example of the overlapping forex sessions: