GLOSSARY // Day Trading
Premarket
Premarket is the 4:00 a.m. to 9:30 a.m. ET session where US stocks trade electronically before the official open. Most brokers enable a narrower window (often 7:00 or 8:00 a.m. start) and many accept only limit orders during it.
Liquidity is a fraction of regular hours, so spreads that sit at a penny during the day can widen to 10-50 cents premarket, and one 5,000-share market order can move a small cap several percent. That thinness cuts both ways: premarket prices show you where a gapper is being valued in real time, but the levels are less trustworthy until regular-session volume confirms them.
Earnings releases and most economic data (8:30 a.m. ET for CPI and jobs numbers) land in this window, which is why the biggest repricings of the day often happen before 9:30.
A retailer reports earnings at 7:00 a.m. and beats on both lines. By 8:15 a.m. it has traded 900,000 shares premarket and sits 9% above the prior close at $34.20, with a 15-cent spread — versus its usual 2-cent spread during regular hours.
Related terms
Educational only — not financial advice. Definitions simplified for clarity; markets are messier than definitions.