Longbridge Launches Pre-Market US Options
Longbridge Securities just launched what it calls the world's first pre-market U.S. options trading capability. The move is designed to help global investors react to news and market shifts outside of standard trading hours, overcoming time zone barriers.
The new pre-market session for U.S. options runs from 4:00 a.m. to 9:30 a.m. Eastern Time, a significant extension from the standard 9:30 a.m. market open. This service is aimed primarily at global investors, particularly in Asia, allowing them to trade during their evening hours (5:00 p.m. to 10:30 p.m. in Singapore) rather than overnight. While 24-hour trading has been available for some index options like the SPX and VIX, this marks the first time a retail-focused online brokerage is offering pre-market access for options on individual stocks and ETFs. Previously, this capability was generally reserved for institutional and professional market participants. The initial rollout focuses on highly liquid tech and market leaders. The list includes options on ETFs like QQQ and SPY, and individual stocks such as Apple (AAPL), Tesla (TSLA), NVIDIA (NVDA), Amazon (AMZN), Microsoft (MSFT), Meta (META), and Alphabet (GOOGL), among others. This extended window allows traders to react to significant overnight news, such as a tech company's earnings report released after the previous day's market close. An investor could use options to hedge an existing stock position or speculate on the direction of the stock price before the regular market opens and the majority of traders can react. However, trading during these extended hours carries distinct risks. Liquidity is typically much lower than during the main session, which can lead to wider bid-ask spreads—the gap between the buying and selling price. This means the cost to enter and exit a trade can be significantly higher. For example, an option with a $0.35 spread during regular hours might see that spread widen to $1.25 in the pre-market due to lower trading volume. This increased cost can erode potential profits, and the lower volume can also lead to higher price volatility and partial or unfilled orders. To encourage adoption, Longbridge is initially waiving commissions and platform fees for this new pre-market options trading service. The firm states the service is powered by its proprietary technology and an AI-driven platform, positioning it as a move to give retail investors tools previously only available to institutions.
