The U.S. stock market is one of the largest financial markets in the world in terms of market capitalisation and trading volume. Of late, many Indian investors have been investing in U.S. stocks as a means to leverage the wealth creation opportunities that the country’s stock market offers.
Since the stock markets of the U.S. and India feature low correlation, having American stocks in your portfolio can help you reduce risk through diversification.
Like many others, if you’re also planning on investing in American stocks, you need to first make yourself aware of the U.S. stock market timings. But before we get to the part where we take a look at the trade timings, let’s take a brief overview of the U.S. stock market.
The U.S. Stock Market – An Overview
Just like in India, the U.S. stock market is also dominated by two exchanges – the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotations (Nasdaq).
Among these two exchanges, the NYSE is the oldest and the largest in the U.S. and the world in terms of market capitalisation. The Nasdaq, on the other hand, has the distinction of being the world’s first fully electronic stock trading exchange and is currently the second-largest in terms of market capitalisation.
The NYSE is home to some of the oldest and the most financially sound companies in the world. Meanwhile, you can find most of the new-age tech companies listed on the Nasdaq exchange.
U.S Stock Market Timings
Now that you’ve gotten an overview of the U.S. stock market, let’s get a closer look at the typical trading hours that the market follows.
As with the stock market of any other country, the trading hours in the U.S. are also classified into three parts – pre-market trading, normal trading and after-market trading. Both the pre-market trading hours and the after-market trading hours are often known as extended trading hours.
Since the U.S. is a very large country in terms of land area, it has six time zones – Pacific time, Mountain time, Hawaii-Aleutian time, Alaskan time, Central time and Eastern time. However, for stock trading, the U.S. only considers Eastern time. This is primarily because the NYSE and the Nasdaq, the two premier stock exchanges, are situated in New York, which is on the eastern coast of the country. Here’s a more in-depth look at the Eastern time zone.
Eastern Time (ET) Zone
As you’ve already seen, the eastern coast of the U.S. follows the Eastern time zone. However, the ET is sub-classified into Eastern Standard Time (EST) and Eastern Daylight Time (EDT). The country switches between using EST and EDT depending on the season.
Eastern Daylight Time (EDT)
The country switches to Eastern Daylight Time (EDT) during the spring and summer seasons. The EDT is behind the Coordinated Universal Time (UTC) by 4 hours. This puts the Indian Standard Time (IST) ahead of the EDT by 9 hours and 30 minutes.
Eastern Standard Time (EST)
The U.S. uses Eastern Standard Time during all the other seasons. The EST is behind the Coordinated Universal Time (UTC) by 5 hours. This puts the Indian Standard Time (IST) ahead of the EST by 10 hours and 30 minutes.
Now that you’ve understood the Eastern time zone, let’s take a look at the U.S. stock market timings. The table below should give you a fair idea of the trading hours.
|Trading Hours||Eastern Time (ET)||Indian Standard Time (IST)|
|Pre-market trading||4.00 AM – 9.30 AM||1.30 PM – 7.00 PM|
|Normal trading||9.30 AM – 4.00 PM||7.00 PM to 1.30 AM|
|After-market trading||4.00 PM – 8.00 PM||1.30 AM to 5.30 AM|
Similar to India, the U.S. stock market is open for trading on all weekdays starting from Monday to Friday except notified holidays. The market remains closed on the weekends.
As an investor interested in U.S. stocks, you should always take the time difference due to the variation in the time zones into account when making trading decisions. Remember to account for daylight savings time, which comes into effect during the spring and summer months in the U.S. since it sets the trading timings back by an hour.
In addition to the U.S. stock market timings, make sure to also consider other factors like taxation, foreign exchange conversion, brokerage and other charges when investing. This will help you become a better investor by allowing you to make more informed decisions.
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