direct access

[spc]

Is it possible for the individual trader to trade in the auction between 7:50 - 8:00 am (ftse 100) using direct access??
If yes, which CFD brokers allow it?

 

[ns1000]

Is it possible for the individual trader to trade in the auction between 7:50 - 8:00 am (ftse 100) using direct access??
If yes, which CFD brokers allow it?

I tihnk you might have misunderstood how the auction works. Anyone with direct access can place bids and offers onto SETS in the ten minuted before 8.00; no trades are actually made during this period though (you can't hit a bid or lift an offer); the prices you see are the worst levels at which anyone wants to trade.

At about 8.00, the uncrossing algorithm assess the price at which most shares will be traded, and this is the price at which the share uncrosses (the opening price). It is common to get an improvement over the price you entered into the system (i.e your sell limit was 135, but the share uncrossed, and you were filled at 137).

The same is true of the closing, and any intra-day auctions.

Brokers such as E-Trade, IG Markets and GNI have direct access platforms which will let you trade in the auction.

Good luck

 

[spc]

Gaps

ns1000,
Thanks for your reply.
Can you please tell me how do GAPS ouccur in prices before markets open.
tks

 

[ns1000]

ns1000,
Thanks for your reply.
Can you please tell me how do GAPS ouccur in prices before markets open.
tks

By gaps, I guess you're referring to differences between one night's closing price, and the opening price the following morning.

The thing to remember is that overnight news can impact on the value traders place on a share, be it the movement of the Hang Seng (which has a major effect on stocks like HSBC and Standard Chartered), or company results, which are generally released at 7am. The SETS book is order driven - the price is created not as a function of the previous day's close, but from the bids and offers placed by traders. In this respect it is a wholly transparent market.

As a side issue, this is why you'll often see a disparity between the cash FTSE and the futures price + fair value; the futures are order driven, the screen price of the cash relies on the last traded price for each component stock. Until all the stocks have ticked, it won't show a true price.

I hope this is what you meant , and I haven't meandered off on a tangent...

 

[spc]

ns1000,

Yes, that's what I meant by gaps.

Are those bids and offers which are placed by traders before markets open actually traded?

let's say I put an offer of 3.50 during auction hours and the markets open (based on matching bid and offer) at 3.75. Does this mean my order got filled at 3.50??

Or will get it filled at 3.75 or the next best price?

Tks for your help, I appreciate it!

 

[ns1000]

ns1000,

Yes, that's what I meant by gaps.

Are those bids and offers which are placed by traders before markets open actually traded?

let's say I put an offer of 3.50 during auction hours and the markets open (based on matching bid and offer) at 3.75. Does this mean my order got filled at 3.50??

Or will get it filled at 3.75 or the next best price?

Tks for your help, I appreciate it!

Hi,

That's right, these bids and offers are placed in the ten minuted before the uncrossing. They don't match against each other until 8am. Then the machine works out at which price the highest number of shares will trade. You're right, if you put an order in to sell down to 3.50, and the market uncrosses at 3.75, you will get a price improvement, and sell at 3.75.

Good luck

Nick

 

[spc]

Hi,

That's right, these bids and offers are placed in the ten minuted before the uncrossing. They don't match against each other until 8am. Then the machine works out at which price the highest number of shares will trade. You're right, if you put an order in to sell down to 3.50, and the market uncrosses at 3.75, you will get a price improvement, and sell at 3.75.

Good luck

Nick

But what if I place a buy order at 3.50 during auction hours and the market opens at 3.75, then what?? does my order get filled at 3.50 or 3.75?
Sorry Nick, I know you must be getting fed up of me.

Tks a lot
Sid

 

[ns1000]

But what if I place a buy order at 3.50 during auction hours and the market opens at 3.75, then what?? does my order get filled at 3.50 or 3.75?
Sorry Nick, I know you must be getting fed up of me.

Tks a lot
Sid

No problems. If you bid 350, and the market opened at 375, you wouldn't be filled. Your order would remain on the order book as a 350 limit.

 

[spc]

No problems. If you bid 350, and the market opened at 375, you wouldn't be filled. Your order would remain on the order book as a 350 limit.

Tks Nick,
So basically nobody really makes money or has the opportunity to make money in the price gap that occurs so often due to news such as final results or trading statements out at 7am for Uk companies