Why are stock markets open?

When will the stock exchange open in 2021? An overview of important trading hours

Last updated & checked: 30.03.2021


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Shares can also be ordered from the online broker at midnight. However, the purchases are usually only carried out on the next trading day. Because even today there are still fixed trading hours at which you can trade. The opening times of the exchange vary from provider to provider. When does the stock exchange open? Most stock exchanges are open from morning to evening on weekdays. A few exchanges are even open almost around the clock.

In this article we go into the opening times of various stock exchanges in Germany, the USA and other countries. We also highlight some “stock market wisdom” and tips on when is the best time to trade.

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Opening times of the exchange

  • Xetra auctions from 8.50 a.m.
  • From 9.00 a.m. trade
  • At Tradegate also from 9 a.m.
  • Core trading time in Frankfurt until 5.30 p.m.
  • International exchanges at other times

It is no longer as contemplative as here at the Bank for Savings and Wealth Creation in the 1960s, but there are still fixed stock exchange opening times. Photo: ING-DiBa press photo

Why are there trading hours?

In many countries, shops are now open around the clock, seven days a week. Brokers and online direct banks also have no opening times. It is astonishing that the stock exchange of all things only opens its doors relatively late. As long as stocks were mainly bought and sold in floor trading, fixed trading hours were not questioned, but today their meaning is increasingly being questioned.

But fixed trading hours also have advantages. After all, even in computerized retail, people have to monitor and control the work of the machines. Longer opening hours of the exchange would also increase the pressure on traders to be present around the clock. And finally, small caps in particular are only traded at certain times so that there is sufficient supply and demand. Longer trading hours would have no effect here, even with many papers that are continuously traded, there would probably not be enough turnover at night.

Computer trading also needs people to monitor and control it. In addition, there is not enough trading for some stocks at night for a price to be formed. Therefore, there will also be trading hours in the future. For titles that are listed on the CME, however, there is in some cases almost around the clock trading.

When does the Frankfurt Stock Exchange open?

The most important stock exchange in Germany is clearly the one in Frankfurt with Xetra trading. Pre-trading begins here at 7.30 a.m. The actual start is at 8:50 a.m. with the first auction. Because a lot of orders came in during the night and in the morning, an auction is held in the morning at which the first prices are also formed. Actual trading on the Xetra stock exchange then begins at 9 a.m., at least for stocks that are continuously traded.

Further auctions take place after 1 p.m., starting with the DAX and TecDAX stocks and ending with the second-line stocks traded exclusively in the auction process. So if you want to buy or sell a seldom traded asset, the trading time starts at 1:25 p.m. with the midday auction and ends five minutes later.

Xetra trading ends at 5.30 p.m. with the closing auction. This is followed by post-trading until 8 p.m.

The core trading time in Xetra is from 9:00 a.m. to 5:30 p.m., including pre- and post-trading, and trading takes place from 7:30 a.m. to 8:00 p.m.
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When does Wall Street open?

Wall Street is arguably the most famous and important stock exchange in the world. Wall Street opens at 9:30 a.m. local time and ends again at 4:00 p.m. So Wall Street is open from 3:30 p.m. CET to 10 p.m. CET. This means that the actual trading time on Wall Street is significantly shorter than, for example, Xetra trading. Closely connected to Wall Street are the futures exchanges, which are not based in New York, but in Chicago. Options and futures on stocks, indices, commodities, bonds, etc. are traded there. The trading time of the CBOE (options on companies, indices and ETFs are traded there) is from 3:30 p.m. to 10:00 p.m. our time.

At the CME, the largest futures exchange in the world, trading takes place from midnight to 10.15 p.m. and from 10.30 p.m. to 11 p.m., i.e. almost around the clock. This is also the reason why brokers can also offer CFD trading on indices and commodities at night. With the futures exchange in Chicago you have the possibility to hedge your positions or you have a market to take positions there.

When does Tradegate open?

The German stock exchange Tradegate, based in Berlin, opens every trading day from 8 a.m. to 10 p.m. The offer is aimed in particular at private investors. The advantage of this exchange is that there are no brokerage fees etc. for private investors. That means, apart from the bank's order fees, customers only pay the applicable spread. Outside of the Xetra times, the spread is of course a little higher, as the volume is significantly lower overall. During Xetra trading hours, the difference in the spread between Xetra and Tradegate is negligible.

Different exchanges, different trading hours

In principle, trading hours apply to almost all stock exchanges. Even the youngest German Xetra competitor, the Tradegate Exchange in Berlin, which was only founded in 2009, has set times. As we have already mentioned, stocks, ETFs and other exchange-traded products can be traded there from 8:00 a.m. to 10:00 p.m., regular funds (i.e. not ETFs) until 8:00 p.m. and trading in bonds ends at 5:30 p.m.

The stock exchange, as well as the one in Frankfurt and the regional stock exchanges, is closed on Saturdays and Sundays. Similar times apply abroad, but the time difference must be taken into account. The Japanese stock exchange opens in the morning, but then it is still night in Europe. Professional traders make partial use of this, they always trade products traded on several exchanges where the exchange is currently open. This is particularly easy with commodities and foreign exchange, while stocks are often only traded on certain stock exchanges.

Almost all stock exchanges have fixed opening times, including the regional exchanges and the Tradegate Exchange, which was founded in 2009. Some exchanges, such as the CME, the largest futures exchange in the world, are open almost around the clock.
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Trade CFDs and Forex 24/5

Anyone who has already dealt a little with CFD and Forex trading will find that they can often trade around the clock - at least during the week. This is because the trader does not trade directly on an exchange, but - in the case of a market maker - directly with the broker. Of course, the broker also needs a way to hedge positions. For this he can use the futures market at the CME. This is why traders can often trade commodities and indices 24/5.

Forex trading, on the other hand, does not take place on an exchange, but in the interbank market. There is no central stock exchange, but a network of different participants. Traders can also participate in the forex market by opening an account with a forex broker. Due to the global orientation, trading also takes place 24/5.

What is the best time to act?

At what time is it best for investors to trade? That depends on the trading strategy. For those who invest long-term and buy a lot of traded assets, it makes little difference when they place the buy order. Because for the investor it is not a question of making a profit within a short period of time, for example within a few days or weeks. For the long-term oriented investor, only the long-term view is important. Therefore, it hardly matters whether the price is a little above or below the closing price of the last day when you buy it. Still, there are some “stock market wisdoms” that investors can look out for, especially if they are not quite as long-term oriented. We'll go into some of them below.

1. Trade when the volume of trade is greatest

Admittedly, this is not necessarily a stock market wisdom, but rather a very practical tip and, somewhere, also common sense. It is logical that trading should preferably take place when the trading volume is greatest. Because the price of a security is created by supply and demand. The more market participants and the more trading volume, the better for the trader. In addition, the spread can then also be kept lower. When is the trading volume at its greatest?

  • During Xetra trading hours (from 9:00 a.m. to 5:30 p.m.) the trading volume on German stock exchanges is high
  • It will be even bigger in the afternoon when the US stock exchanges open and even more market participants enter the market
  • From 2.30 p.m. or 3.30 p.m. to around 5.30 p.m., the trading volume in this country tends to be greatest

The same applies to orders for foreign stocks, for example US stocks. Investors in this country can also trade many US stocks on German stock exchanges. But the market volume is only greatest in the afternoon when the US stock exchanges open. Investors should therefore preferably trade when the home exchanges are open.

2. Never buy or sell on Monday!

A rule on the stock exchange says that you should never trade on Monday. Especially not on Monday morning. Why? Investors should always be aware that it is ultimately human supply and demand that affects prices. Of course, the orders are processed by computer. But there are always people behind the orders. Even if they use computer-aided programs, it is not the computer that makes the money, but the people behind it. On a weekend, the information from the previous week is processed. New information may be added. It's not just about news from business and industry. Also personal information and needs.

 

Let's take a fictional example: A couple finds the long-awaited dream property on the weekend. In order to realize their wish, they place sell orders for a large part of their share portfolio over the weekend. So on Monday morning sell orders for several shares come on the stock exchange. But the sales have nothing to do with business news, just personal needs.

 

Of course, the orders of this couple do not de facto influence the price of a security. But the sum of all decisions made over the weekend results in the rate that is determined on Monday by supply and demand. It just so happens that many such decisions, including weddings, vacations, company sales, an inherited share portfolio are sold, etc. are made on the weekend. Because there you have peace. The price setting that is made on Monday morning usually has relatively little to do with the company's key figures. Then the US stock exchanges open on Monday afternoon. And here is exactly the same game taking place. It is therefore not surprising that there is often a "back and forth" on Monday. The clever investor therefore only places his orders on Monday evening or on another day of the week, but not immediately at the start of the stock market.

 

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3. Buy when the cannons thunder, sell when the violins play

One or the other investor knows this stock market wisdom for sure. As simple and easy as it sounds, it is difficult to put into practice. Of course, this is not directly about the opening time of an exchange, i.e. at what time of the day an investor should buy. Rather, it is about recognizing an upswing or a downswing on the stock market. The quote does not describe anything else about countercyclical investing, but investors can read a lot of information and background information. So maybe just two pointers at this point:

  • The term “cannons thunder” refers to the entire market. It also happens, of course, that the cannons thunder in a single value. In that case, however, investors should check carefully whether this is possibly not justified. Just because a price is falling doesn't mean it will rise again in the future. If a company engages in mismanagement, then a price decline is only too justified.
  • Many investors do not manage to adhere to the above rule despite better knowledge. This is also due to the fact that there is not a stock market crash every year. The last major stock market crash (of course it depends on what is called a crash) was in 2011. Since then, 7 years have passed (as of 08/2018). If you hadn't gotten in at the time, you would still have to wait for new buying opportunities. A solution for many private investors is therefore monthly savings plans in ETFs or stocks. Investors receive an average price and do not have to time the market themselves.

4. Buy at night or wait for the stock market to open

For investors, the question now arises whether you can place an order with a clear conscience at 10:00 p.m. when the stock exchange is still closed. Of course, investors can place an order at any time. However, as we saw in “Rule 1”, the order should be placed when the trading volume is greatest. And trading right at the start of the stock market in the morning is not always a good idea, as we can see from "Rule 2".

Especially in short-term trading and with seldom traded and therefore often volatile values, investors should not enter orders at night. If the purchase order is placed in the evening at 9 p.m. and is only executed the next day at 1.30 p.m., new information may already have influenced the price. In practice, investors should only trade such values ​​with a limit anyway, regardless of whether the investor places the order the evening before at 9 p.m. or just at 1 p.m.

We have now looked at some “stock market wisdom” about when it is best to place an order. In principle, this should always be the case when the trading volume is greatest and the first information has already been processed in the course. If you are long-term oriented, you should also set up a savings plan with the help of an ETF or directly with a share savings plan. This eliminates the challenge of having to time the market for this investor.

Conclusion: when does the stock exchange open? Investors should follow the opening hours of the stock exchange

When does the stock exchange open? Xetra trading takes place from 9:00 a.m. to 5:30 p.m., but there is still pre- and post-trading. In any case, rarely traded securities are only bought and sold at an auction around 1.30 p.m. The Tradegate Exchange opens at 8:00 a.m., shares are traded there until 10:00 p.m. The international competitors also know opening times, but due to the time difference, the stock exchange in New York or Tokyo can also be open when it is night in Frankfurt. Futures trading on the Chicago Stock Exchange CME takes place almost around the clock. It is advisable to only trade when the trading volume is greatest. This is mostly the case when both the European and US stock exchanges are open in the afternoon. CFDs and Forex traders can usually trade 24/5. But even here traders should of course consider when the trading volume is greatest.

Image source: shutterstock.com

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