How are opening prices set? - groups.Xorte.com

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Number of messages in the thread: 4

1. Date: 2008-11-30 21:27:00
Subject: How are opening prices set?
From: G. Morgan <n...@i...invalid> Search message by this author

How are opening prices set for stocks on a daily basis? I want to purchase a
particular security tomorrow (CLWR), and I have a open order with my broker
set to buy at "market". I don't want to miss a rally, so I'm wary of setting
a limit price or my order may not be filled. On the flip side though, I don't
want to get a bad surprise if the open price is -way- above the closing price
from Friday, only to see the price tumble shortly after the market open.

Is there a way to calculate/predict what an opening will be? Or is there a
better strategy I can use? Thanks.

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2. Date: 2008-12-01 07:03:57
Subject: Re: How are opening prices set?
From: "ynotssor" <y...@e...com> Search message by this author

In news:8bac7e71d529d84d070d1410efe095cfnp@mypost.inval
id,
G. Morgan <n...@i...invalid> typed:

> ... I don't want to get a bad surprise
> if the open price is -way- above the closing price from Friday, only
> to see the price tumble shortly after the market open.
>
> Is there a way to calculate/predict what an opening will be? Or is
> there a better strategy I can use? Thanks.

Place your order at limit. If it doesn't fill, then re-assess your need.
Under-capitalized MOO's (Market On Open) without a working plan are usually
slaughtered; that's what makes the market (makers) work.

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3. Date: 2008-12-01 23:56:42
Subject: Re: How are opening prices set?
From: G. Morgan <n...@i...invalid> Search message by this author

ynotssor wrote:

>> Is there a way to calculate/predict what an opening will be? Or is
>> there a better strategy I can use? Thanks.
>
>Place your order at limit. If it doesn't fill, then re-assess your need.

Gotcha.

>Under-capitalized MOO's (Market On Open) without a working plan are usually
>slaughtered; that's what makes the market (makers) work.

I can see why MOO's can be slaughtered. What I don't understand is how the
market comes up with an opening price. It would seem only logical that a
stock would open at the same price it closed at the day before -- but that is
rarely the case.

Please forgive my ignorance, I am a complete newbie.

P.S.: As it turns out the order was automatically cancelled anyway because
the ticker symbol changed today. I was able to get in @6.82 and it closed
@7.48 -- not bad, considering what a terrible day it was.

--
It takes a big man to cry,
but it takes a bigger man to laugh at that man. -Jack Handey

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4. Date: 2008-12-02 02:23:53
Subject: Re: How are opening prices set?
From: Dr Tormento <r...@t...com> Search message by this author

G. Morgan <n...@i...invalid> wrote in
news:d75a0c1a0f31968a958860eb0113c0c5np@mypost.inval
id:

>
> I can see why MOO's can be slaughtered. What I don't understand is
> how the market comes up with an opening price.

For NYSE listed stocks a specialist dictates the opening price based on
his reading of the order book.

>It would seem only
> logical that a stock would open at the same price it closed at the day
> before

No it wouldn't. All the day orders placed on the preceeding day have
expired and there is no reason to think that they will all be reinstated.