To The Moon

Hello Tigers!

With the arrival of November and the onset of daylight saving time, many Tigers in the Asia-Pacific region have noticed a change in the opening and closing times of the US stock market.

Why is this happening?

How does the trading time for US stocks change during daylight saving time and standard time? In this article, I will provide you with the answers!

Ⅰ. What is Daylight Saving Time?

Daylight Saving Time (DST) is a time system implemented in various regions, especially in Europe and America, to conserve energy.

During the summer, when there is longer daylight, some countries that observe DST will adjust the time forward by one hour. This allows people to wake up and work an hour earlier, maximizing the use of daylight and saving energy on lighting.

When winter standard time arrives, the time is adjusted back to the original system, shifting it one hour backward.

So, when does the switch between daylight saving time and standard time occur?

Typically, daylight saving time is from April to October, and standard time is from November to March. However, the exact transition points vary among European and American countries.

The specific times are as follows:

Ⅱ. Impact of daylight saving time on US stock trading

1.Impact on Europe and America:

Practically no impact. For people in Europe and America, the entire society collectively adjusts the time forward or backward by one hour, and daily trading is not affected.

2.Impact on the Asia-Pacific Region:

Daylight saving time does have an impact on the Asia-Pacific region (with China Beijing time as a reference). The specific changes can be seen in the table below:

(Pre-market, In-market, and After-market trading hours for U.S. stocks during daylight saving time and standard time, Monday to Friday)

Ⅲ.Differences and significance of pre-market and after-market trading

Daylight saving time adjustments mainly affect the pre-market, in-market, and after-market trading hours for traders in the Asia-Pacific region. Some users may not fully understand these three trading periods, so let's delve into them.

1.What are Pre-market and After-market Trading?

Pre-market trading and after-market trading refer to mechanisms that allow trading outside the regular trading hours, extending the trading day. They are often referred to as "non-regular trading hours" and are one of the distinctive features of the U.S. stock market.

What are the rules for pre-market and after-market trading?

Generally, stocks eligible for pre-market and after-market trading must be listed on an exchange. Stocks traded over-the-counter (OTC) cannot participate in these types of trades. Trading is usually facilitated through Electronic Communication Networks (ECNs) in an electronic manner, and the order type is typically a limit order.

For example, when trading US stocks on the Tiger Trade app during pre-market and after-market hours, you can only choose limit orders, not market orders!

If you want to buy the Nasdaq 100 Index ETF (QQQ) before the market opens, you can enter the name or code in the "Search" interface.

Click on the bottom left "Trade," then "Buy/Long" or "Sell/Short" to enter the pre-market trading interface.

Pre-market and after-hours trading can only be done using limit order. Enter your desired price in the limit price field, fill in the quantity, and click on "Place Buy Order."

After-hours trading is similar to pre-market trading, and I won't list them one by one here.

Note that due to fewer participants during pre-market and after-hours trading, liquidity is relatively weaker, and the bid-ask spread may widen. You need to consider specific conditions when choosing limit prices!

2.Advantages and disadvantages of Pre-market and After-market trading compared to In-market trading

Pre-market and after-market trading provide additional trading opportunities, making trading more flexible and versatile. Sometimes, stock prices react in pre-market hours as soon as news or media reports are released.

Another advantage is that it allows us to make decisions promptly when receiving major market information, such as financial report announcements, economic data results, unexpected events, and international news.

However, pre-market and after-market trading also have limitations and risks, such as:

• Fewer traders participate in pre-market and after-market trading, resulting in much lower stock trading volume compared to regular trading hours. Apart from potential liquidity risks, this may lead to stocks not being executed or only partially executed.

• Due to lower liquidity in pre-market and after-market trading, there may be significant price spreads, meaning you might buy stocks at a higher price or sell them at a lower price.

Overall, pre-market and after-market trading provide more trading opportunities but come with different levels of risk. Due to lower liquidity and higher price volatility during these periods, caution is advised when trading in pre-market and after-market hours.

So, you now have a complete understanding of the impact of daylight saving time on US stock trading. Additionally, remember the advantages and risks of pre-market and after-market trading!

For Tigers interested in US stock investment, feel free to explore the "US Stock Financial Statements For Beginners" course. This course will unlock more stock trading techniques and knowledge for you!