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How to buy coins before the official listing
In the world of cryptocurrencies, pre-market trading is a service that refers to the over-the-counter trading system and is designed to trade new tokens before their official listing.
With pre-market trading capabilities, buyers and sellers can quote and transact at the prices they are interested in before the tokens are even listed. Pre-market buyers and sellers determine the prices of pre-market transactions: they may offer a different price than the tokens after listing.
This type of exchange is very similar to the barter procedure. Let’s say someone who wants to borrow a car shows up at the rental office. But he’s already done. By a favorable coincidence, another person decided to return her car and also went to the office after closing. Therefore, the first latecomer can borrow a car directly from the second.
However, while pre-market trading may reflect market expectations, the price of a token, once listed, will depend on various factors and may not reflect the pre-market price. Both prices are ultimately determined only by the market.
Why does the crypto community need pre-market trading?
Pre-market trading allows traders to buy or sell coins before the official launch for trading on exchanges. Sellers and buyers create orders and post quotes. All transactions are settled Bind (USDT).
Traders can act as makers, creating orders with pre-determined quotes, or as takers, accepting corresponding active orders on the platform. Buyers and sellers must use assets as collateral to ensure timely settlement. After successful and timely payment, the deposit is returned. All transactions are settled in USDT.
Pre-market on traditional and cryptocurrency exchanges. Difference
In a traditional market, pre-market is traded before the official trading hours. It usually occurs early in the morning before the opening of stock exchanges such as the NYSE and NASDAQ.
However, since cryptocurrency markets operate continuously, the term “pre-market” has taken on a different meaning. Cryptocurrency premarkets are platforms where investors can trade tokens before they are officially launched or widely distributed.
Typically, traders use this pre-market to speculate on the value of the cryptocurrency. They will place orders based on the expected value of the tokens after launch.
Traders can interpret price movements outside of normal trading hours and evaluate potential market trends and momentum for the next trading session.
Which exchanges offer pre-market trading services?
In recent months, several large cryptocurrency exchanges, including Binance, KuCoin, Bitgetand others, have introduced pre-market trading services.
Users can get early access to investment opportunities and start trading various tokens before their official listing. Some of the most popular projects in recent months include Notcoin (NOT) AND Hamster Fight (HMSTR).
However, representatives of the exchanges warn that pre-market trading carries significant risks, so it is essential to carefully analyze the market and be prepared for possible surprises.
What traders say
Many traders perceive pre-market trading as an excellent opportunity to create orders to buy or sell tokens before listing. Traders interviewed in the cryptocurrency trading community have different assessments of pre-market trading, but agree on the usefulness of such a tool for the cryptocurrency markets.
Therefore, one of the users of Binance The cryptocurrency exchange noted in a conversation with crypto.news that the possibility of pre-market trading has opened up new trading prospects for it, although this instrument poses some risks.
“Now I can get the most popular tokens before they officially launch on exchanges. Although I take more risks than in normal spot trading, in the case of token listing I have a better chance of earning good money than those who entered the project after the official start of trading on the stock exchange.
Binance trader
Another user of the KuCoin The platform also notes that it has yet to understand the full benefits of pre-market trading as it has just invested in the new HMSTR token. At the same time, he reminded that, as a rule, the sending of tokens could be delayed in case of delay in listing.
“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 tokens is still being finalized. No project guarantees listing on a specific exchange, so traders they always take a little risk.
KuCoin trader
Should you try pre-market trading?
When investing in a particular asset, traders must consider the risks. No matter how promising the project may seem, no one can guarantee the profit or, sometimes, the safety of the invested funds.
Therefore, before choosing pre-market trading, a trader should be aware of the risks such as limited liquidity, considerable bid/ask spreads and price unpredictability.