How to Access Pre Market Trading on Robinhood
Are you an early bird investor looking to get a head start on the day's trading activities? If so, accessing pre-market trading on Robinhood can provide you with the opportunity to make trades before the stock market officially opens. In this guide, we will walk you through the steps to access pre-market trading on Robinhood, as well as the benefits and risks involved.
What is Pre-Market Trading?
Pre-market trading refers to the buying and selling of stocks before the official trading hours of the stock market. This extended trading session allows investors to react to news and events that may have occurred outside of regular trading hours, such as earnings reports or economic data releases.
Benefits of Pre-Market Trading on Robinhood
- Early Access: By participating in pre-market trading, you can take advantage of market movements before the rest of the market opens.
- Opportunity for Price Discovery: Pre-market trading can provide insights into how a stock may perform once the market officially opens.
- Manage Overnight Risks: If you have overnight positions, pre-market trading can help you manage any risks or take advantage of new opportunities.
Risks of Pre-Market Trading on Robinhood
- Limited Liquidity: The pre-market trading session typically has lower trading volumes and liquidity, which can result in wider spreads and increased volatility.
- Limited News and Information: Since most companies do not release news or earnings reports during pre-market hours, you may be trading without all the relevant information.
- Higher Price Volatility: The lack of liquidity in pre-market trading can lead to larger price swings, which may result in unexpected losses.
How to Access Pre-Market Trading on Robinhood
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Upgrade to Robinhood Gold: In order to access pre-market trading on Robinhood, you will need to upgrade to the Robinhood Gold premium subscription. This subscription offers access to pre-market and after-hours trading, as well as other premium features.
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Enable Extended-Hours Trading: Once you have upgraded to Robinhood Gold, you can enable extended-hours trading in your account settings. This will allow you to trade during pre-market hours from 9:00 AM to 9:30 AM EST.
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Place Pre-Market Orders: After enabling extended-hours trading, you can place pre-market orders for the stocks you wish to trade. Keep in mind that not all stocks are available for pre-market trading on Robinhood.
Accessing pre-market trading on Robinhood can provide you with valuable opportunities to react to market events and make informed trading decisions. However, it is important to be aware of the risks involved, such as limited liquidity and increased price volatility. By following the steps outlined in this guide, you can start exploring the world of pre-market trading on Robinhood and potentially enhance your overall trading strategy.
