4 a.m. Trading Begins, at Lightspeed
February 14, 2013
Lightspeed Financial said it will start handling trades for both institutions and retail traders starting at 4 a.m., effective immediately.
The provider of direct, electronic access said it will expand its hours for trading in U.S. stocks to 4 a.m., from 7 a.m. That means trading will start 5.5 hours before national exchanges open for public trading.
Trading will continue until 8 p.m., four hours after national exchanges formally close.
The Nasdaq Stock Market Tuesday evening said in a note to its members that it intends to open pre-market trading at 4 a.m. as well. If it gets Securities and Exchange Commission approval, that will begin on March 18.
The move is designed to allow traders to react to overnight news events.
“We are seeing an upward trend in client trading activity during the early pre-market hours,” said Lightspeed’s chief technology officer Scott Ignall. “We believe this stems from our sophisticated client base seeking a competitive edge by modifying their trading strategies based on news and market activity in Europe and Asia.”
At Nasdaq, trading will cover all National Market System stocks. All functionality, data feeds and order types currently available from 7:00 a.m. to 9:30 a.m. will be available from 4:00 a.m. until 9:30 a.m., Nasdaq said in its note.
In pre-market trading, transactions can take place only at prices agreed upon by sellers and buyers. Only limit orders are used. But they are not executed, if there are no takers.