How to Buy Premarket in Robinhood

You’ve done your research, made up your mind, and want to invest in a stock, but the markets are yet to open. Fortunately, that’s not a problem because you can buy stocks before the standard trading market hours kick off via Robinhood.

However, Robinhood is a relatively new trading platform. Markets are generally tricky to navigate, so you may be unsure how to buy premarket on Robinhood. But once you know how, it’s a simple process to get a leg up and buy stocks before the market officially opens.

Read on to learn about trading premarket on Robinhood using different devices. The article will also cover the pros and cons of getting in on the action early.

How to Buy Premarket on Robinhood on Your Web Browser

Extended hours trading on Robinhood is a handy feature that allows you to make trades outside traditional market hours, a full two and a half hours ahead of the regular opening time. It’s a great way to get a head start before other traders have a chance to react to events that happened while the markets were closed.

Here are the steps to buy premarket using Robinhood on your web browser:

1. Go to and log into your Robinhood account on your web browser.
   
2. Type the name of the stock that you want to buy in the search box at the top of your screen.
   
3. Click on the desired stock in the drop-down menu to display the stock information.
   
4. Select the Buy (Stock Name) tab in the trading window on the right of your screen. In the trading window, click on Invest In and choose either shares or dollars. Enter the number of shares or dollars of the stock you want to buy in the box located under the Invest In box.
   
5. Click on Review Order.
   
6. Select Buy and click Done to make your premarket purchase.

The information displayed will reflect the stock’s last trading price when the exchange closed the previous day. During premarket trading, financial assets are more commonly purchased in shares as opposed to dollars. This is because more securities are available to buy as shares in the extended hours trading period.

How to Buy Premarket on Robinhood on Your Mobile App

The Robinhood financial trading platform is not only accessible via your web browser. You can also buy stocks in the premarket using the app. Its super user-friendly interface makes it the go-to medium for many when making trades on Robinhood.

Follow the below steps to make a premarket purchase on the Robinhood app:

1. Launch the Robinhood app on your mobile device. Enter the stock name you wish to buy into the search box at the top of your screen.
   
2. Tap the green + icon next to the stock to display the stock info.
3. Select the Buy button.
   
4. Specify if you want to buy in shares or dollars by tapping the drop-down menu at the top right of the screen. Type the number of shares or dollars you wish to purchase.
   
5. Select Review.
   
6. Swipe Up to confirm the premarket purchase. Tap the Done button to finish.

During premarket trading hours, many stocks have limitations on volume and other factors. Furthermore, some stocks may be completely unavailable to buy during the premarket period.

How to Set a Limit Order on Robinhood for Premarket Trading on Your Mobile App

During premarket trading hours, market volatility is higher, and market liquidity is lower. Therefore, to reduce the risk of premarket stock purchases on Robinhood, you will have to set a limit order. A limit order gives you the power to specify a price ceiling that you’re prepared to pay for a share to help limit any losses.

This is how you set a limit order on Robinhood:

1. Go to the Robinhood app on your mobile device. Scroll down, select Search, and type in the stock name.
   
2. Tap on Trade and then select Buy.
   
3. Select the Shares drop-down menu icon at the top right of your screen. Scroll down and tap Limit Order.
   
4. Enter the price limit you’re willing to pay and hit Continue.
   
5. Select Extended Hours to set your limit price during premarket hours.
   

Robinhood will also provide the option to set time in force after you’ve set your limit order for a particular stock. The feature allows you to specify how long the order will stay active and is useful for controlling the timing of your trades.

What Are the Benefits of Buying During the Premarket Period?

Robinhood allows investors to begin buying stocks at 7 a.m. rather than the normal market opening time of 9:30 a.m. This additional time to purchase stocks before the market awakens can be helpful for a multitude of reasons.

Foreign Markets

Global equity markets are deeply interconnected. Therefore, markets in different time zones can have a massive impact on stock prices in the U.S. Premarket buying allows you to factor in these foreign market influences and get the jump before the U.S. market opens.

Company Earnings Announcements

Often, companies will report their earnings after the market closes. The ability to buy stocks in businesses that announce positive news that will likely lead to a hike in stock value before the market opens is invaluable. It will allow you to capitalize on the rise in share prices before other investors can react and drive up the price.

Reacting to Events

Markets are largely speculative, meaning that news related to companies released outside of regular trading hours can influence their value. Premarket buying gives you the power to react preemptively ahead of the rest of the market to capitalize on any news that may reap profits.

Flexibility

Premarket buying facilitates much more versatile and flexible trading. The extended hours allow you to buy stocks at a time that better suits you and market conditions. Moreover, it opens the door for more opportunities to maximize the return on your trades.

Lower Liquidity

Lower liquidity during premarket trading hours is a double-sided coin in the sense that it can result in either increased opportunity or risk. On the positive side, lower trade volumes can result in lower stock prices for investors.

What Are the Risks of Buying During the Premarket Period?

Utilizing the premarket buying period via Robinhood can present you with a host of benefits. However, it’s not without its fair share of risks. There are a range of hazards involved in purchasing stocks prior to the market opening.

Lower Liquidity

As mentioned, lower liquidity in the premarket can be positive or negative. On the negative side, lower liquidity can cause significant fluctuations in stock prices because large purchases can impact the price more dramatically compared to when there’s higher liquidity.

Higher Volatility

Volatility refers to the magnitude and frequency of price swings in the market. The reduced number of trades occurring during the premarket period greatly increases volatility in stock prices and the market in general. Volatile trading conditions are risky due to the amount of stock value that can be lost quickly.

News and Events

News and events that happen outside of normal trading hours can be used to your advantage during premarket buys. It can also have the opposite effect. For instance, if you overestimate or misinterpret information, it could result in losses.

Get In Early and Make Some Money

Premarket buying is a great tool that allows you to get the jump on other investors before the market opens. It enables you to take advantage of information that was unavailable when the markets were open and react before the bell rings and the rest of the market catches on. This can result in more money in your pocket, and that’s always a good thing.

How did your premarket buying play out, and was it as profitable as you’d hoped? Let us know in the comments section below.