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Can You Buy Options Premarket?

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Written By
Dan Buckley
Contributor Image
Written By
Dan Buckley
Dan Buckley is an US-based trader, consultant, and part-time writer with a background in macroeconomics and mathematical finance. He trades and writes about a variety of asset classes, including equities, fixed income, commodities, currencies, and interest rates. As a writer, his goal is to explain trading and finance concepts in levels of detail that could appeal to a range of audiences, from novice traders to those with more experienced backgrounds.
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Updated
Mar 14, 2024

The trading of options contracts during the premarket session is usually not possible.

Some index options can be traded outside standard market hours.

Futures options can be traded outside the market hours for securities (assuming the futures exchange is open).

For example, options tied to major indexes (like SPX – e.g., ES futures) have extended trading hours beyond the standard market hours.

 

Market Hours

For US exchanges, such as the Chicago Board Options Exchange (CBOE) and the New York Stock Exchange (NYSE), market houts typically run from 9:30 AM to 4:00 PM EST.

Unlike stocks, which can be traded in premarket and after-hours sessions (for many traders), options are restricted to these standard hours.

 

Why Options Trading Premarket (Usually) Isn’t Allowed

This limitation is due to the need for a more liquid market environment to facilitate the pricing and risk management aspects inherent in options trading. (Options are inherently less liquid than the underlying securities.)

Liquidity tends to be higher during regular trading hours when all market participants are active.

This helps with more efficient pricing and execution of options contracts.

 

FAQs – Can You Buy Options Premarket?

Can you buy options during the premarket session?

No, options generally can’t be bought or sold during the premarket session. Options trading is restricted to standard market hours.

Some broad indexes are tradable via options during extended hours through futures markets.

What are the standard market hours for options trading?

Standard market hours for options trading on US exchanges like the Chicago Board Options Exchange (CBOE) are from 9:30 AM to 4:00 PM Eastern Time.

Why can’t options be traded in the premarket session?

Options are not traded in the premarket session due to the need for a more liquid market.

Liquidity is essential for the efficient pricing and execution of options, and this is best achieved during standard market hours when all participants are active.

Can stocks be traded in the premarket session?

Yes, stocks can be traded in both the premarket and after-hours sessions, unlike options.

If you’re interested in premarket stock trading, please check with your broker.

Are there any financial instruments that can be traded outside of standard market hours?

Yes, certain financial instruments, including stocks and ETFs (exchange-traded funds), can be traded outside of standard market hours in the premarket and after-hours sessions.

However, options and most bonds don’t have this flexibility.

What are the risks associated with trading in the premarket and after-hours sessions?

Trading outside of standard market hours comes with increased risks such as lower liquidity, higher volatility, and wider bid-ask spreads.

These factors can lead to less efficient pricing and increased transaction costs.

How can you trade options?

To trade options, an investor needs to have a brokerage account that is approved for options trading.

Trading occurs during standard market hours, and investors can place various types of options orders through their brokerage’s trading platform.