How the US market works

Who takes part in the market

The US stock market is not one building but a network of connected electronic systems. The main participants:

• Exchanges. The largest are the NYSE (New York Stock Exchange) and Nasdaq. A company lists on one of them, but its shares trade in many venues at once.
• Market makers — firms that constantly quote both a buy and a sell price. They keep the market liquid and earn the spread in return.
• Your broker — the intermediary between you and the market. It routes your order to wherever the best price is and holds the shares in your name. You don't pick the exchange — the broker routes for you.

At a broker, your cash and shares should be held separately from the broker's own money. US brokers also carry SIPC protection — if the broker fails, up to a limit. That is not protection against market losses: if the stock falls, nobody compensates you. On choosing a broker: How to buy US stocks from Uzbekistan.

Trading hours in Tashkent time

The regular session is 09:30–16:00 New York time (ET), Monday to Friday. Uzbekistan does not change its clocks (UTC+5), while the US does twice a year. So:

• US summer time (second Sunday of March to first Sunday of November): 18:30–01:00 in Tashkent;
• US winter time (early November to March): 19:30–02:00 in Tashkent.

Outside the regular session there are two "extended" sessions:

• Pre-market — 04:00–09:30 ET, i.e. 13:00–18:30 in Tashkent in summer, 14:00–19:30 in winter;
• After-hours — 16:00–20:00 ET, i.e. 01:00–05:00 in summer, 02:00–06:00 in winter.

Look at the chart: between summer and winter the whole schedule shifts by an hour, while the ET times stay fixed. In the extended sessions volume is very thin, the spread is wide, and many brokers accept only limit orders. Prices can jump, but those moves often do not hold in the regular session: Why most pre-market stops are false.

Even within the regular session, not all time is equal: the first 30 minutes after the open and the last hour before the close are the busiest and most volatile. For a beginner, firing market orders in the first minutes after the open is one of the most expensive habits there is.

Holidays and short days

The market is closed on US holidays: New Year's Day, Martin Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day, Juneteenth (June 19), Independence Day (July 4), Labor Day, Thanksgiving and Christmas. Some days — such as the Friday after Thanksgiving and Christmas Eve — close at 13:00 ET. That is winter time, so 23:00 in Tashkent. Exact dates are in the calendar.

Bid, ask, spread and liquidity

At any moment a stock has two prices: the highest price buyers are offering — the bid — and the lowest price sellers are asking — the ask. The gap between them is the spread. Buy with a market order and you pay the ask; sell with a market order and you get the bid. So buying and immediately selling costs you roughly one spread.

The three examples on the chart:

• a $200 large company with a $0.02 spread — 0.01% of the price. Buying and selling 100 shares costs about $2;
• a $40 mid-size company in the pre-market with a $0.40 spread — 1%;
• a $5 small company with a $0.10 spread — 2%. Buying and selling 1,000 shares ($5,000) costs about $100.

The spread is a measure of liquidity — the ability to buy or sell quickly without moving the price. It depends on daily volume and the "depth" of the order book. When liquidity is low, your order fills at a worse price than you expected — that is slippage.