A person who invests in securities, whether he is a large trader or a small junk, whether he understands or does not understand anything, whether he has an active portfolio or does not know anything or half about the stock exchange, knows that in order to carry out transactions on the stock exchange – there are hours of activity. Just like the hours of operation of your bank.
For example, on the Israeli stock exchange, the business hours are between 09:30 and 17:30.
For example in New York – from 16:30 to 23:00 Israel time.
But there is a “dark” side that not everyone knows. Most do not. Trading in securities during non-trading hours.
The intention is, of course, for securities on the American stock exchange rather than in Israel. However, when it comes to dual-listed securities (those traded on the American stock market as well as in Israel), trading outside the trading hours is important.
At the end of the trading day in New York, a wonderful stage begins in which securities are traded in a stage called AFTER MARKET.
At this stage, investors and traders are working on one security or another according to news published after the active trading is closed so that changes in value can be seen even though there is no “normal” trading.
Another “Dark” trading stage is the trading stage before trading opens in the morning. The Pre-Market stage.
Again, this is trading in securities even before trading on the stock exchange was opened, and thus it is possible to understand how trading will begin on the same stock exchange. At this stage investors and traders react to all kinds of news published overnight and are interested in responding even before the regular / current markets opens.
There are also trading in the indices sector when there is no open markets.
These are futures contracts on the large stock indices – FUTURS.
The largest share indices on the world’s largest stock exchanges are also traded in futures contracts that indicate the opening of the trading session that morning. The contracts are traded in the hours prior to the opening of trading and reflect the assessments of investors and traders as to how trading will open that morning in the markets.
In this case as well, the activists respond to global or local events even before the official opening of the exchange rates and operate within the futures contracts. It is not necessarily that the market will behave in the same manner throughout the trading day, but the probability that the opening of trading will be similar to what is expressed in futures contracts is very high.
In the case of dual-listed shares, when the stock exchange in Israel is open, if the investors are pushing up a dual share in the pre-market stage, the stock will respond accordingly in the stock exchange in Israel, even though the US stock exchange is closed.
Even in the event of changes in future contracts, positive futures will have a positive effect on active exchanges. For example, futures contracts on the stock exchange in the United States are likely to have a positive impact on the stock exchange in Israel and on exchanges in Europe that operate almost during the same hours.
Fluctuations in indices or stocks may result from investors and traders’ expectations, as reflected in the trading stages in which the stock exchanges are closed – a pre-market or an aftermarket.