Brokerage Launches First Pre-Market US Options Trading

Traditionally, U.S. options trading is confined to regular market hours, from 9:30 a.m. to 4:00 p.m. Eastern Time. This new feature from Longbridge extends the trading window by 5.5 hours, opening it up from 4:00 a.m. to 9:30 a.m. ET. For investors in Asia, this translates to more manageable evening hours, such as 5:00 p.m. to 10:30 p.m. in Singapore. This move challenges the historical divide between institutional and retail investors, as pre-market access was typically reserved for professional participants. By opening this window to a wider audience, Longbridge aims to increase market liquidity and allow individual investors to react to overnight news and corporate earnings announcements before the regular market open. The initial launch focuses on highly liquid stocks and ETFs, including popular tech names like Apple, Tesla, and Nvidia, as well as major index ETFs like SPY and QQQ. While Longbridge claims a "world's first" for a full-platform pre-market U.S. options trading solution, it's worth noting that extended-hours trading already exists for some option types. The Cboe offers nearly 24-hour trading, five days a week, for options on major indexes like the S&P 500 (SPX), Russell 2000 (RUT), and the VIX. However, options on individual stocks and many ETFs have not been available for pre-market trading. Trading in these extended hours comes with a distinct set of risks, primarily lower liquidity and higher volatility. With fewer participants, the gap between buying and selling prices (the bid-ask spread) can widen, potentially leading to less favorable prices. Price movements can be more erratic, and what happens in the pre-market may reverse once the regular, more liquid trading session begins. To incentivize adoption, Longbridge is offering zero commission and zero platform fees for its pre-market options trading during the initial launch period. This aligns with their broader strategy of lowering entry barriers for retail investors, which has included "lifetime 0 commission" policies for stock trading in the U.S., Hong Kong, and Singapore markets. The company, founded in 2019, has backing from major financial institutions and is regulated by the Monetary Authority of Singapore (MAS). Longbridge has previously integrated AI-powered tools to provide market analysis and insights, aiming to narrow the information gap between retail and institutional investors. The brokerage's stated goal is to continue moving towards a 24-hour continuous global trading model, and this pre-market options launch is a significant step in that direction.