When you're looking to trade options, one of the first things you need to decide is when to trade. The two main times are during regular market hours and after hours. This article will discuss the pros and cons of each so that you can make an informed decision about what's best for you.

Do options trade 24 hours? 

The regular market hours for options are from when the stock market opens at 9:30 a.m. ET and ends at 4 p.m. However, you can also trade options during extended hours. One of the benefits of pre-market and after-hours trading is that there is typically less competition. 

This means that there are more opportunities to buy or sell at a price you're comfortable with. However, it's important to remember that there is also less liquidity during these times. This means that it may be harder to find a buyer or seller when you want to exit a trade. 

Another thing to consider is the range of prices that options trade at during different times. During regular market hours, options tend to trade within a relatively tight range. On the contrary, during extended hours, the ranges can be much wider. 

This will result in a greater potential for profits but also greater losses. So, what's the best time to trade options? 

The answer depends on your goals and objectives. If you're looking for more opportunities, then pre-market or after-hours trading may be a good choice. However, if you're risk-averse, then sticking to regular market hours may be the better option. Ultimately, it's up to you to decide what's best for your trading strategy.

What time do options start trading? 

The time options start trading is at 9:30 a.m. ET. The time of day when an options contract can first be traded is known as the "open interest." This is the time when options trading starts. For most contracts, this time is between eight and nine in the morning. However, some brokers allow pre-market trading as early as four in the morning

What does "pre-market" mean? 

Before the official opening of the stock market, there is a period of time known as the pre-market in which trading takes place. The hours from four to nine in the morning are typically referred to as the "pre-market" period. 

This is a time when many institutional investors trade large blocks of shares. These trades often have a significant effect on stock prices when the regular market opens at nine-thirty. Because of this, it can be advantageous for individual investors to have access to the pre-market. 

Pre-market trading is not for everyone, however. It can be a volatile and unpredictable time, with prices moving rapidly in all directions. If you're not comfortable with this kind of risk, stick to regular market hours.

Can you trade options pre-market? 

In most cases, the pre-market trading period is restricted to the trading of only listed equities. There is a possibility that some equities, such as those with a restricted float or that are not widely owned, as well as small-cap stocks, might not have adequate volumes to support pre-market trading as a feasible option. 

During the pre-market period, it is not possible to trade options. The pre-market is a critical period of time for the options market. It is during this time that many institutional investors trade large blocks of shares.

Can you buy options pre-market?

In most cases, the answer is no; nevertheless, there are a few notable exceptions. The owners of stock options can acquire or sell additional assets in addition to stocks at a predetermined price at some point in the future. However, in the vast majority of circumstances, options may only be purchased or sold within normal trading hours. 

However, most equities may be traded either before or after those specified hours. Some investors find it difficult to comprehend why many stock options do not participate in premarket or after-hours trading on a par with other securities. 

According to Jim Bittman, who works for the CBOE Options Institute, which is the teaching branch of the options exchange, stock options do not trade in extended hours because there is not enough demand. 

Can you sell options pre-market? 

You can sell options pre-market. However, you will not get the same price as the opening bell. This is because a lot of people sell their options before the market opens, so there is less demand for them in the pre-market trading hours. 

You can also sell after-hours options, but you will only be able to do this if your brokerage firm allows it. If they do not allow it, then you will have to wait until after the market closes before selling your option.  

Can options be traded after hours? 

Yes, options can be traded after hours. 

Can you buy options after hours? 

Yes, you can buy options after hours. Just like with stocks, you will not be able to get the same price as the closing bell. This is because fewer people are trading in the after-hours market, so there is less demand for options.

Can I sell options after hours?

ETFs (exchange-traded funds) like SPY and QQQ are the most popular instances of this on the US/Americas exchanges, as was indicated before. 

Other significant outliers include: They are often traded for an extra fifteen minutes after the closing bell has rung, but at the time of expiry, they are settled based on the price of the underlying asset at the close of trading. 

Take note that on the day an option's contract expires, trading in that option may cease along with the usual trading session.

Advantages and disadvantages of trading options pre-market and after hours 

Trading options pre-market and after-hours can be very advantageous for those who are looking to hedge risk or take advantage of short-term price movements. However, it is important to understand the risks associated with these types of trades. 

Advantages of Trading Options Pre-Market 

  • You can take advantage of price movements that occur before the market opens 
  • You can hedge risk by taking positions in advance of events that could cause prices to move

Disadvantages of Trading Options Pre-Market

  • Low volume means that there is less liquidity and you may not be able to get your order filled at the price you want 
  • You may have to pay higher commissions to your broker because of the low volume 

Advantages of Trading Options After Hours

  • You can take advantage of short-term price movements that occur after the market closes
  • You can get better prices due to the lack of competition in the after-hours markets 

Disadvantages of Trading Options After Hours 

  • Low volume means that there is less liquidity and you may not be able to get your order filled at the price you want 
  • You may have to pay higher commissions to your broker because of the low volume 
  • You will not be able to take advantage of long-term price movements that occur after the market closes because you will have to close your position before the market opens the next day. 

The pre-market and after-hours periods are trading windows that occur before the regular market hours. These sessions can be advantageous for options traders because they offer more flexibility in terms of when an option can be executed. However, there are some disadvantages to trading during these times as well. 

Final Thoughts

When it comes to options trading, no two people are the same. Perhaps you prefer trading before or after market hours to take advantage of unique price fluctuations during particular periods of the day. 

Whatever your style is, technical analysis can help you leverage your options trading even more. If you've successfully used these strategies in the past to make money for yourself, you may find that technical analysis is an essential component of your trading strategy.