Best Time To Buy Stocks

Historically, some days or months have tended to be better or worse for stocks. These so-called market anomalies challenged theories of efficient markets. However, research shows that as these anomalies became more well-known and trading became more automated, these have largely all disappeared."}},"@type": "Question","name": "Is There a Way to Trade Stocks Over the Weekend?","acceptedAnswer": "@type": "Answer","text": "Not really. Major stock markets close on Friday afternoons and may offer extended after-hours trading until Friday evening. Saturday and Sunday, however, are often inaccessible for most traders.","@type": "Question","name": "Is There a General Rule for Timing Trades?","acceptedAnswer": "@type": "Answer","text": "The closest thing to a hard-and-fast rule is that the first hour and last hour of a trading day are the busiest, offering the most opportunities. But even so, many traders are profitable in the off-times as well."]}]}] Investing Stocks Bonds Fixed Income Mutual Funds ETFs Options 401(k) Roth IRA Fundamental Analysis Technical Analysis Markets View All Simulator Login / Portfolio Trade Research My Games Leaderboard Economy Government Policy Monetary Policy Fiscal Policy View All Personal Finance Financial Literacy Retirement Budgeting Saving Taxes Home Ownership View All News Markets Companies Earnings Economy Crypto Personal Finance Government View All Reviews Best Online Brokers Best Life Insurance Companies Best CD Rates Best Savings Accounts Best Personal Loans Best Credit Repair Companies Best Mortgage Rates Best Auto Loan Rates Best Credit Cards View All Academy Investing for Beginners Trading for Beginners Become a Day Trader Technical Analysis All Investing Courses All Trading Courses View All TradeSearchSearchPlease fill out this field.SearchSearchPlease fill out this field.InvestingInvesting Stocks Bonds Fixed Income Mutual Funds ETFs Options 401(k) Roth IRA Fundamental Analysis Technical Analysis Markets View All SimulatorSimulator Login / Portfolio Trade Research My Games Leaderboard EconomyEconomy Government Policy Monetary Policy Fiscal Policy View All Personal FinancePersonal Finance Financial Literacy Retirement Budgeting Saving Taxes Home Ownership View All NewsNews Markets Companies Earnings Economy Crypto Personal Finance Government View All ReviewsReviews Best Online Brokers Best Life Insurance Companies Best CD Rates Best Savings Accounts Best Personal Loans Best Credit Repair Companies Best Mortgage Rates Best Auto Loan Rates Best Credit Cards View All AcademyAcademy Investing for Beginners Trading for Beginners Become a Day Trader Technical Analysis All Investing Courses All Trading Courses View All Financial Terms Newsletter About Us Follow Us Facebook Instagram LinkedIn TikTok Twitter YouTube Table of ContentsExpandTable of ContentsWhat Are the Best Times to Trade Stocks?Best Times of Day to Buy or Sell StocksBest Day of the Week to Buy StocksBest Day of the Week to Sell StocksBest Month to Buy StocksBest Month to Sell StocksBest Date of the MonthAre There Really Best Times to Buy or Sell Stocks?Is There a Way to Trade Stocks Over the Weekend?Is There a General Rule for Timing Trades?The Bottom LineInvestopediaTradingBest Time(s) of Day, Week, and Month to Trade StocksBy

best time to buy stocks

Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.

Historically, some days or months have tended to be better or worse for stocks. These so-called market anomalies challenged theories of efficient markets. However, research shows that as these anomalies became more well-known and trading became more automated, these have largely all disappeared.

The closest thing to a hard-and-fast rule is that the first hour and last hour of a trading day are the busiest, offering the most opportunities. But even so, many traders are profitable in the off-times as well.

The bid-ask spread is described as the difference between the highest possible price a buyer is ready to pay and the lowest price a seller is ready to accept for a stock. The amount of trading activity in the security as a whole influences the spread between bid and ask prices; higher trading activity leads to narrower bid-ask spreads, and vice versa. The pre-market session draws only a fraction of normal market participants. As a result, the session typically suffers low liquidity and orders take a long time to fill.

Unfortunately, pre-market trading comes with risks such as greater buy-ask gap, a lack of liquidity, considerable price volatility, and the requirement of professional expertise. Limited market participation makes the market less efficient, which causes low liquidity and sluggish order fulfilment. If you place a buy order during this time, you will wait to be matched with the seller willing to accept your price. Orders may thus take longer to execute than normal.

In general, the pre-market session is only open to trading listed equities. This is because stocks with insufficient volumes, such as those with a tiny float, are not widely owned, or are small-cap stocks, may need to be a better candidate for pre-market trading.

As a result of the high volatility, the first hour after the opening bell tends to draw many day traders. That is the time when there is a rush to process orders that came through after the previous closing bell.

As with the first, the last hour of the regular session also tends to be volatile. That is the time when day-traders try to close their positions. It is also the time when most investors may try to respond to late-day breaking news such as major court rulings, regulatory actions, and more.

The after-hours trading kicks off at 4:00 p.m. and runs until 8:00 p.m. EST. As with the pre-market, the after-hours session typically has fewer market participants. Moreover, transactions are handled through alternative electronic channels since market makers are absent during this time.

After-hours trading can help you accelerate the T+2 trade settlement timeline. Every deal in the capital market has a life cycle. This begins when a purchase or sell order is placed for execution and concludes when the deal is concluded. This process is known as the trade life cycle. T+2 settlement cycle denotes a trade life cycle that takes two days to complete, from commencement to settlement. For example, if you make a trade after the closing bell on Monday, the trade would settle on Wednesday. However, your trade would delay by a day if you waited until the following day to make the transaction.

The best time to buy shares is during the regular session. That is when the market is most active and efficient. However, you would want to avoid the first and last hours of the regular session as they tend to be volatile. 041b061a72