How come UK Stocks open down/up on good/bad news , as soon as it hits 8am?

mb11

Junior member
24 0
Say a company announces good news at 7am, how come the stock will Open up before any trading can take place, it actually opens at a higher price?

is it the Asian markets trading UK stocks way before we open so by the time we do open it is automatically priced in?
 

Love 2 Trade

Newbie
8 1
Market makers often put the price up or down pre open, if they feel that the news justifies a rise or fall in the share price.
 

Hate2Lose

Active member
155 3
Say a company announces good news at 7am, how come the stock will Open up before any trading can take place, it actually opens at a higher price?

is it the Asian markets trading UK stocks way before we open so by the time we do open it is automatically priced in?
Although the markets officially open at 8am, there is a 10 minuet auction period that happens every morning between 7:50am and 8am whereby institutions and markets participants can place orders onto the order book and cross trades. If there has been some good news on a stock that has been released at 7am then those who wish to sell the stock would demand a higher price than the previous nights close and those buying the stock would expect to have to pay a premium on last night close therefore orders will be input onto the order book to reflect this hence pushing the price up before the stock opens officially for normal trading at 8am. This will work the opposite should news be poor!

The US and Asian will also play a role in where the overall markets opens as the UK will generally take the baton from the Asian markets before passing it on to the US and then back to Asian and so on.
 

Similar threads


AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock