What is the difference between pre-market and after-market trading? Detailed explanation of the differences between pre-market and after-market trading

In traditional financial markets, pre-market and after-market trading refer to trading activities outside the regular trading period. Although the cryptocurrency market is trading around the clock, trading platforms like Bitget also offer similar features, especially some comprehensive platforms that trade stocks and cryptocurrencies at the same time. This article will clarify the differences in pre-market and after-market trading and explore its impact on currency price.

Four differences in pre-market after-market trading:

The main differences between pre-market after-market trading and conventional trading periods are in four aspects: trading time, liquidity, price fluctuations and trading volume:

1. Trading time:

   Pre-market trading occurs before the start of the official trading, while after-market trading is carried out after the end of the regular trading.

2. Liquidity:

   Before and after trading, there are few traders, and the bid and offer price difference is large; while the liquidity is high during the regular trading period and the price difference is small.

3. Price fluctuations:

   Before and after the trading price fluctuates violently, because there are few participants, the impact of a single transaction is significant; the price fluctuations during the regular trading period are relatively stable.

4. Trading volume:

   Pre-to-market trading volume is low, and the trading volume is high during regular trading periods.

How does pre-market and after-market trading affect the price of the currency?

Although the cryptocurrency market is open 24/7, before and after trading may still significantly affect the price of the currency. The reason is:

• Insufficient liquidity: The scarce participants lead to low liquidity, and large-value transactions or small-value transactions may cause severe price fluctuations.

• Information Release:

  Important news, announcements or market events are usually released during this period, rapidly affecting market sentiment and prices.

• Arbitrage behavior:
Arbitrageurs use price differences between different platforms to arbitrage, aggravate price fluctuations.

• Stop loss and take-profit order:
Price fluctuations may trigger stop loss and take-profit orders, further driving price fluctuations.

• Market expectations:
Pre- and after-market price changes reflect market expectations and affect investors' strategies during regular trading periods.
Position adjustment:

Investors and institutions may adjust their positions during this period to respond to market changes.

In short, although the cryptocurrency market does not have strict trading period restrictions, the particularity of pre- and after-hours trading makes its impact on the currency price not neglected. Investors should be cautious and adjust their trading strategies according to market conditions.

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