Open (stock exchange) Definition | American News

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In financial markets, the word “open” has multiple uses, but the following two definitions may be particularly useful for investors:

  • Open order. Order to buy or sell shares or securities that has not been executed or cancelled. Orders can remain open for a specific duration or until a set of pre-determined parameters are met to execute a trade.
  • Market open. The time at which the regular trading session begins for stocks and other securities on a particular exchange. In the United States, most markets open weekdays at 9:30 a.m. EST.

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Market open is the time when the regular trading session begins on an exchange. Different exchanges have different opening hours. The New York Stock Exchange, or NYSE, and Nasdaq open for stock trading at 9:30 a.m. EST. Futures markets allow trading almost 24 hours a day, six days a week. More futures contracts Markets open on the Chicago Mercantile Exchange on Sundays at 6:00 p.m. EST, and futures markets do not close until 6:45 p.m. EST on Fridays.

The NYSE, Nasdaq, and other exchanges signal the opening and closing of the market each day by ringing a bell on the trading floor. Exchanges often welcome public company executives or other special guests to ring the opening bell.

When a stock opens for business each day, its opening price is the price at which the first trade of the day is executed. A stock’s opening price may differ significantly from its closing price in the previous day’s trading session. the stock Exchange tends to experience high transaction volume and high volatility within minutes of market opening.

When a trader places an order to buy or sell a stock or other security, the trader must specify the duration of the order, which represents the length of time the order will remain active until that it be cancelled. An active order is considered open until it is executed or cancelled. A daily order remains open until the end of the trading day, while a good-til-cancel, or GTC, order remains open until the trader manually cancels it or until it reaches an expiration date set by a broker. Most brokers set GTC orders to expire 30-60 days after they are placed.

Regular trading sessions on major US exchanges take place from 9:30 a.m. EST to 4 p.m. EST Monday through Friday each week. The exchange is closed for a single day on 10 holidays throughout the year, including Christmas, Thanksgiving, and New Year’s Day. June 16, National Independence Day has been added as a stock market holiday in 2022. The stock market generally only closes one full weekday at a time for holidays to limit single closings to three consecutive days , including weekends. The NYSE and Nasdaq have also closed periodically due to emergencies, such as Hurricane Sandy in 2012 and the September 11 terrorist attacks in 2001.

Traders can trade stocks before market open on the NYSE and Nasdaq on weekdays during the before marketing session, which begins at 4 a.m. EST. The majority of pre-market trading volume occurs between 8:00 a.m. EST and the opening bell at 9:30 a.m. EST. These exchanges also allow trading after hours in the evening. The after-hours trading session runs from the closing bell at 4 p.m. EST until 8 p.m. EST. Stocks frequently make big moves during pre- and after-hours trading sessions as companies often release important news, including quarterly information. income reportsduring these sessions.

The stock market and major stock indices such as the S&P500 trade during normal market hours, but stocks index futures contracts trade nearly 24 hours a day. Stock futures, such as S&P 500 E-mini futures, reflect market expectations of where the S&P 500 index might trade at the future, and traders often use these index futures to predict how the stock market will trade during the regular trading session. opens. Traders can use the fair market value of S&P 500 futures contracts to calculate the implied opening price of the S&P 500 even when the stock market is closed.

The stock market open is often one of the most action-packed times of the day, when all the news since the previous day’s market close is collectively factored into the market. Trading volume and volatility are generally relatively high during the first hour after opening. Many traders set up their first trades of the day during this period.

The opening price of the S&P 500 or individual stocks is also an important part of many technical analysis calculations and tools, such as charts and candlestick patterns.

On an average trading day, the first hour of trading after market open has the highest volume of any hour of the day. When news occurs outside normal trading hours, there can be an extreme imbalance between buying and selling volume in the market or on individual stocks in the first few minutes after the market opens, which may result in large fluctuations in share prices. It is common for stocks that open higher or lower than the previous day’s closing price to continue to rise or fall for the first five to 10 minutes after opening. Over the next 20 minutes, these actions often reverse direction, at least temporarily, creating profit opportunities for day traders.

During the last hour of the trading day, large institutional investors investors, such as index fund managers and mutual fund managers, tend to be very active. Fund managers buy and sell stocks near the close to match the daily performance of their benchmark. Mutual fund managers usually wait until the end of the day to buy or sell stocks so that they have a clear idea of ​​how much money they need to raise to cover daily redemptions or how much daily cash flow they need to invest. In the final minutes of the trading session, institutional investors tend to reinforce the direction in which stocks have already traded during the day.

In the mid-1800s, the NYSE opened at 10 a.m. EST and closed between 2 p.m. EST and 4 p.m. EST Monday through Saturday. In 1887, the NYSE set more rigid trading hours of 10 a.m. to 3 p.m. on weekdays and 10 a.m. to noon on Saturdays.

In 1952, the NYSE eliminated Saturday trading and pushed back the closing bell from 3:00 p.m. to 3:30 p.m. Afternoon trading was extended from 3:30 p.m. to 4:00 p.m. in 1974. In 1985, the NYSE moved its opening bell from 10 a.m. at 9:30 a.m., where it remains to this day.

FAQs

Yes, if your broker allows premarket trading, you can buy stocks as early as 4:00 a.m. EST, but you may be charged higher fees or commissions than you pay for trading during market hours.

No, the NYSE and Nasdaq are closed for New Years Day, Martin Luther King Jr. Day, Washington’s Birthday, Good Friday, Memorial Day, National Independence Day 19 June, Independence Day, Labor Day, Thanksgiving and Christmas. They are open for Veterans Day and Columbus Day (observed as Indigenous Peoples Day in some US locales).

An opening spread is a large change in a stock’s price between one day’s close and the next day’s open.

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