Folks, sorry to raise what is probably a very silly question, but I'm confused. I'm looking at my Stockwatch now, at 07:52, and I can see activity on some stocks, mainly gains - but the market is not open, so what is this activity? As I said, sorry if that's silly, but I'm a newbie to this real time watching, and I can't see what's happening. Thanks in advance for any help. :-)

brittsac,

The movements you are seeing are caused by the opening auction. This is a 10 minute period leading up to 8am. Below is an explanation:



The auction process occurs regular at opening and closing of the markets and sometimes intraday auctions are called if a stock moves 5% or more in one trade.

The closing auction is for a five-minute period (random) from 16:30 to 16:35 after the close of normal business. In this period trading is suspended for five minutes and allows participants to submit orders to buy and sell at a stipulated price. Throughout this five-minute period, a theoretical uncrossing price is calculated continuously and dynamically and displayed.

At the end of the five minute period, any orders that can be completed are matched up and executed at one specific price, the uncrossing price. The uncrossing price of the auction (the mean price at which the bids and offers can be matched) is then taken as the closing price for the stock.

The key difference between the auction period and normal trading is that participants can input orders to buy or sell at market. This instruction can create short-term imbalances in liquidity that in turn forces stock prices up or down. Normally auction are used by Institutions to move large size orders of stock through the markets.

Ah, OK Ian, thanks for that :-). Was this forum the correct place to ask that sort of question by the way? I don't want to annoy regular posters with daft questions, but couldn't see another place to ask.

brittsac,

If you have any questions please feel free to ask - they are friendly bunch and we will always try to help out - you may want to take a look at some of our help pages, as they will give you a good grounding in what we offer and some of the jargon that is used,

Ian

Thanks Ian :-)