Different Markets, Different Time Zones, Different Market Hours
One of the first questions many investors have is how market hours work. Fact is, there are a lot of different markets. Some of them are open 24 hours a day, while others are only open during set and restricted times. Hours can vary a lot from market to market, so make sure you pay close attention to the market hours. The forex market, for example, has different hours than the New York Stock Exchange, and the New York Stock Exchange has different hours than the Tokyo Stock Exchange. So you need to make sure you pay close attention to the trading times in whatever markets you plan on trading in.
Many assets are traded around the world, and the markets that trade them operate at different times. This often means you’ll be able to obtain an asset if you really want it by trading on international markets. Let’s say you want to purchase gold through the gold market. You could buy gold through the USAGOLD market in Denver, which is open from 6 a.m. to 6 p.m. The Australian Securities Exchange, on the other hand, is open from 10 a.m. to 4 p.m. All of these market times are based on local times, which vary a lot, meaning that gold markets are open nearly around the clock.
Standard Market Hours
If you’re wondering what time does the market open, you need to head to the specific market’s website. Generally, the stock market open time is around 9 a.m. local time, but a few of them open at different times, so make sure you check. The same is true of the market close time. Most markets close in the afternoon, often right around 4 p.m. but again different markets can close at different times.
The 24-7 Market
Some markets are open 24 hours a day, 7 days a week, and 365 days a year. One example of this is the forex market. Forex refers to currency trading, and the market never closes down. This world trade market is open 24 hours a day because companies and other organizations constantly need to exchange currencies. If currency markets were not open all the time, global trade might ground to a halt. Forex markets are massive and billions of dollars can be trading hands at any point in time. For this reason currency exchange hours are essentially unlimited. So if you want to trade US forex you can do so at pretty much any time.
For traders, hours can be extremely important. Markets that are open all the time allow traders to react more quickly to developing events. In many ways this can actually make markets more stable. Let’s say a company that’s only traded on the New York Stock Exchange announces an important development after market hours close, say a security breach or an accounting scandal. When markets open the next day, stock prices will likely swing violently because pressure will build up over night. On the other hand, if a government announces a major event, such as raising interest rates, forex markets will be able to react no matter what time it is.
Local Market, Local Market Hours
This probably sounds confusing, and rightly so. Markets are complicated beasts and most of them run on local time. Many companies trade stocks only in local markets. So if you want to buy Chinese stocks, you’ll often have to buy them directly through Chinese markets. The same is true of many stocks in the European Union and elsewhere. Often, if you’re going to trade stocks from different countries, it is a good idea to limit yourself to one or two countries. For one, you won’t have to worry about so many different hours. Two, you’ll be able to focus on specific regions and build up a local knowledge base.
Whatever you decide to do, make sure you know your stuff. Investing is all about knowledge and learning how to adapt to different situations. For example, if you’re trading assets that are traded 24 hours a day, such as forex, it’s a good idea to set up some automated measures. For example, if one of your assets starts to plummet while you’re sleeping, you’ll be able to set up automated commands that will sell off the asset once it drops a certain amount, such as 10 percent.
When Markets Close
Also, make sure you pay attention to holidays. Many markets close for national holidays. Besides holidays, markets can close down because of financial emergencies, technical glitches, and weather patterns. Make sure you keep all of these things in mind when you’re trading. If markets close unexpectedly, or are shut down for a holiday you forgot about, it can affect your trading strategy. While emergencies are impossible to predict, you can find holiday calendars, so make sure you check those out!