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In the world of cryptocurrencies, premarket trading refers to an over-the-counter trading system designed for trading new tokens before their official listing.
Why Does the Crypto Community Need Premarket Trading?
Premarket trading allows traders to buy or sell coins before they are officially launched on exchanges. Sellers and buyers create orders and post quotes, with all transactions settled in Tether (USDT).
Traders can act as makers, creating orders with predetermined quotes, or as takers, accepting corresponding active orders on the platform. Assets are used as collateral to ensure timely settlement. After successful and timely payment, the deposit is returned.
Premarket on Traditional and Cryptocurrency Exchanges: Differences
In traditional markets, the premarket refers to trading before official trading hours, usually early in the morning before stock exchanges like the NYSE and NASDAQ open.
However, since cryptocurrency markets operate non-stop, the term “premarket” has a different meaning. Crypto premarkets are platforms where investors can trade tokens before their official launch or wide distribution.
Traders use this premarket to speculate on the value of a cryptocurrency, placing orders based on the projected value of tokens after their launch. This allows them to interpret price movements outside regular hours and assess potential trends for the upcoming trading session.
Which Exchanges Offer Premarket Trading Services?
In recent months, several large cryptocurrency exchanges, including Binance, KuCoin, and Bitget, have introduced premarket trading services. Users can gain early access to investment opportunities and start trading various tokens before their official listing.
Some popular projects recently available for premarket trading include Notcoin (NOT) and Hamster Kombat (HMSTR).
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However, exchange representatives warn that premarket trading carries significant risks. It is essential to analyze the market carefully and be prepared for possible surprises.
What Traders Say
Many traders see premarket trading as an excellent opportunity to create orders to buy or sell tokens before they are officially listed. While opinions vary, most traders agree on the usefulness of this tool for the cryptocurrency markets.
“Now I can get the most popular tokens before they are officially launched on exchanges. Although I take more risks compared to regular spot trading, in the case of listing tokens, I have a better chance of making good money than those who entered the project after the official start of trading on exchanges.”
“I understand that executed orders remain valid, and exchange representatives will announce a new settlement time later. However, how long I will wait to receive the tokens is still being determined. No project guarantees listing on a specific exchange, so traders always take a little risk.”
Should You Try Premarket Trading?
When investing in any asset, traders must consider the risks. No matter how promising a project may seem, no one can guarantee a profit or even the safety of invested funds.
Before choosing premarket trading, a trader should be aware of risks such as limited liquidity, considerable bid/ask spreads, and price unpredictability.
For more insights and the latest updates on cryptocurrency trading, explore more news on Global Crypto News.
