The “pre-market trading,” which is commonly heard about in the crypto market, is something that recently made me reconsider a few points.

To put it simply, pre-market trading is a system that lets you buy and sell assets before a token is officially listed on an exchange. With a unique mechanism that differs from spot trading and futures, it drew particular attention during the bearish market of 2023. In fact, platforms like Whales Market and Aevo have a certain presence in this space.

There are two main forms of pre-market trading. One is the token market, where you directly buy and sell coins before they are listed. The other is the points market, where projects distribute points that can be exchanged for crypto assets. The latter works as a strategy for accumulating points in anticipation of future airdrops.

What’s appealing is clear. With early access, you may be able to get tokens at a lower price than the official listing. For early investors, it helps with securing liquidity, and it also creates opportunities for arbitrage targeting price differences. Being able to get exposure to promising projects before listing is also interesting from the perspective of building a portfolio.

However, risks cannot be ignored. In the pre-market stage, liquidity is extremely limited, so it’s likely that you won’t be able to trade at the price you want. Cases where orders are not executed are not uncommon. And then there’s volatility. Right after listing, prices tend to move violently, which can even lead to unexpected losses.

To understand how pre-market trading works, the quickest way is to look at real examples. For example, in the pre-market stage of a certain project, users are subject to a holding limit. If they already have a certain amount of rewards obtained from Launchpool, they’re not allowed to buy more. On the other hand, there’s no limit on selling, so the timing for taking profit can be decided freely.

When the pre-market period ends, orders that have not been matched are automatically canceled, and trading moves to the official market. At this point, deposit and withdrawal functionality is gradually restored, but withdrawals will only be available after 24 hours from the official release.

If we summarize the frequently asked questions, it’s important to note that during the pre-market period, withdrawal and transfer functions are restricted. If the rewards are in a sub-account, they must be transferred to the main account no later than 1 hour before the pre-market starts. You can check order confirmation from the spot order history.

One last thing. You should remember that the performance of pre-market trading does not necessarily translate directly into the initial price at the subsequent listing. It may affect market sentiment, but the official spot start price is determined independently of pre-market prices. In other words, it’s dangerous to make a decision based only on price movements during the pre-market.

Pre-market trading certainly offers attractive opportunities. However, don’t forget that it also comes with risks greater than those of regular spot trading. You should calmly analyze how the market is moving and decide whether to use it according to your strategy.