Understanding the trading hours of the stock and forex markets is crucial if you’re looking to get involved.
In this article, we’ll explore the differences between stock and forex markets, explain what trading hours are and delve into the specific timings for both.
Understanding the differences between stock and forex markets
Both the stock and forex markets are popular for trading, but they’re fundamentally different.
The stock market involves buying and selling shares of publicly listed companies. These shares represent a segment of ownership in a company, and their value fluctuates based on the company’s performance, economic factors and market conditions. Stock trading markets are centralised, meaning they operate through specific exchanges like the London Stock Exchange (LSE) and the New York Stock Exchange (NYSE).
Currencies are traded in the forex market. It’s the largest and most liquid financial market globally, with a daily volume of over $7 trillion. Unlike stocks, forex is decentralised, meaning there is no central exchange. Instead, trades occur over-the-counter (OTC) via a global network of financial institutions.
What are trading hours?
Trading hours refer to the specific times when a market is open for buying and selling activities. These vary depending on the market and the geographical region.
During these hours, users can place orders, execute trades and respond actively to market movements. Outside of them, markets are typically closed, though some activities, like after-hours trading in stocks, may still occur with limited liquidity.
Stock market trading hours
Different exchanges around the world have set trading hours that correspond to the business day in their respective time zones.
For example, the London Stock Exchange operates from 8:00 AM to 4:30 PM GMT, Monday to Friday, while the New York Stock Exchange is open from 9:30 AM to 4:00 PM Eastern Time (2:30 PM to 9:00 PM GMT), also Monday to Friday.
These times are strictly adhered to, and no activity occurs outside of them, except in specific after-hours sessions that some exchanges offer.
Forex market trading hours
The forex market is unique in that it operates 24 hours a day, five days a week. This continuous activity is possible because of its decentralised nature, with overlapping time zones across different regions.
The peak forex trading day starts with the Sydney session at 10:00 PM GMT and is followed by the Tokyo, London and New York sessions. The most active trading periods occur when these sessions overlap, such as the London/New York overlap from 1:00 PM to 4:00 PM GMT.
The forex market closes on Friday night and reopens on Sunday night.
