Trading Hours
Trading usually takes place from Monday to Friday, from a particular market’s opening bell to its closing bell. This is known as a trading session. These timings differ from one nation to another, given the different time zones across the world. Even through a single trading session, the trading volumes and conditions can differ at different times. The characteristics of the trading sessions also differ for different assets, such as stocks, commodities, forex and cryptocurrencies.
The most clearly defined trading session is that of the New York Stock Exchange (NYSE), which lasts from 9:30am to 4:00pm (EST), Monday to Friday. Many traders follow these hours, since the US dollar is the world’s reserve currency, and many commodity prices are quoted in the dollar. The US dollar is also the most highly traded currency in the forex market.
To make the most of trading opportunities, it is important to know the most active trading hours during a session for the asset of your choice. However, due to increased demand for trading, you can also access the markets during the pre-market and after-market hours. This means that trading is possible before a session begins and after the market closes as well. This helps traders capitalise on news and developments that might occur beyond the trading hours.
Major Trading Sessions
There are essentially 3 major trading sessions, based on the largest financial hubs in the world. These are the Asian (Tokyo), European (London) and North American (New York) sessions. The financial markets tend to be the most active while these sessions are open, since most businesses and large banks in these regions conduct their daily transactions during these hours.
The highest trading volumes tend to occur when the trading sessions of two regions overlap. For instance, the London market is still open when the New York session begins. Similarly, the Australian markets are still active when the Tokyo session begins. Asset prices tend to see more volatility during these overlap times. This is why traders keep an eye on the cross-over timings between the session in one region and that of another.
Forex Market Trading Hours
The forex market is the largest financial market in the world. But, unlike other financial markets, trading is not via a central exchange. Rather, trading takes place between market participants through electronic communication networks (ECNs) or phones. The market remains open 24 hours a day, 5 days a week, due to the differences in time zones across the world. The trading week begins at 5:00pm EST on Sunday, when the Australian trading session begins, and ends at 4:00pm EST on Friday, when the New York session closes for the weekend.
The two busiest time zones for the forex market are London and New York. When the sessions of these two regions overlap, the market sees its busiest trading hours and a majority of the daily trading volume. This overlap period is also when the Reuters/WWR benchmark spot forex rate is determined.
However, some currencies, especially those of the emerging economies, are not usually traded 24 hours a day. The most traded currencies globally are the US dollar, euro, British pound, Japanese yen, Australian dollar, Canadian dollar and the New Zealand dollar.
|
Region
|
Trading Hours
|
Time Zone
|
|
Sydney
|
7:00 am to 4:00 pm
|
AEST
|
|
Tokyo
|
8:00 am to 4:00 pm
|
JST
|
|
London
|
8:00 am to 5 pm
|
UTC
|
|
New York
|
8:00 am to 5:00 pm
|
EST
|
