What is the reason for price difference between After-hours and Premarket?

[ipoppy]

All,
This question bugs me a lot. You leave your shares overnight and then you discover that particular stock is up/down without any news. What is the cause of stock price difference between After-hours and Premarket? The same question applies to futures. What mechanism decides what price should be set for on the first minute of Premarket?
Thanks

 

[TheDuder_69]

i would say supply and demand 24/7, but im just a newbie on SIM

 

[scose-no-doubt]

What if news has his other sectors has dragged down the index and thus your stock? What if there has been a big move in currency markets interest rates expectations change and stocks look less attractive?
What if the asian session moves stocks in the same sector and an algo brings the spread back in line? What if there has been a big overnight order?

Probably a million things.

 

[wackypete2]

Larger overnight or pre market orders can move the market, or stock, since volumes are very thin.

Peter

 

[ipoppy]

What if news has his other sectors has dragged down the index and thus your stock? What if there has been a big move in currency markets interest rates expectations change and stocks look less attractive?
What if the asian session moves stocks in the same sector and an algo brings the spread back in line? What if there has been a big overnight order?

Probably a million things.

Thanks for your input. However what I want to know is what mechanism decides for the price at first second of premarket. Let say you got stock closing at $34.40 and then you got premarket open at $34.85.I know there is thousands reason for the price to go up/down during that time but what physically decides to make this price set at $34.85. Is it based on some sort of calculations inside exchange and the futures related to particular stock?
Thanks

 

[jd1888]

Thanks for your input. However what I want to know is what mechanism decides for the price at first second of premarket. Let say you got stock closing at $34.40 and then you got premarket open at $34.85.I know there is thousands reason for the price to go up/down during that time but what physically decides to make this price set at $34.85. Is it based on some sort of calculations inside exchange and the futures related to particular stock?
Thanks

In a book I've read that was supposedly written by a market maker, he says that it is the exchange market maker for that particular stock or sector that decides the opening price. The way that it is supposedly worked out is like others have said due to overnight interest from buyers and sellers.

That all could be a lot of sh*t though.

 

[barjon]

"The pre-market auction starts at 07.50 when participants can enter limit or market orders and the London Stock Exchange calculates in real time the theoretical uncrossing price. This is the price at which maximum volume can be executed. No trading actually takes place on the electronic order book during this period. At the end of the auction period at 08.00 there is a thirty second random end period to prevent manipulation of prices and the stock uncrosses and normal trading commences."

 

[ipoppy]

"The pre-market auction starts at 07.50 when participants can enter limit or market orders and the London Stock Exchange calculates in real time the theoretical uncrossing price. This is the price at which maximum volume can be executed. No trading actually takes place on the electronic order book during this period. At the end of the auction period at 08.00 there is a thirty second random end period to prevent manipulation of prices and the stock uncrosses and normal trading commences."

Thanks . That what I wanted to know. I guess the same system applies to all markets. Still one thing bothers me. Why some of the stocks start premarket earlier than others?
Sorry for being a pain but I guess many folks here would like to know that too.

Thanks again.

 

[Bint_Crusher]

Markets do not move with volume in outside of hours trading. This means a prop floor or hedge fund can spike you out before the real money comes back.

 

[ax218]

Does anyone know at what point gold is likely to reverse the increases in share prices? Any ideas?

ax218

 

[Bint_Crusher]

Does anyone know at what point gold is likely to reverse the increases in share prices? Any ideas?

ax218

What a bone ****ing question, if you want to trade ideas buy something like carbon credits. We have been away from the gold standard for decades, and although there is a corelative theory between gold and the dow there is none behind the pathetically flacid FTSE.whistlingwhistlingeek: