Definition
“At the Opening” is a type of market order given to a broker to buy or sell a security precisely at the price that exists when the stock exchange opens. If the order cannot be executed at the opening price, it is automatically canceled.
Examples
- Stocks: An investor places an order to buy 100 shares of Company XYZ at the opening price. If XYZ opens at $50 per share, the order is executed at $50. If no shares of XYZ are available at the opening price, the order is canceled.
- Commodities: A trader places an “at the opening” order to sell 200 barrels of crude oil at the opening price. If the order meets the opening price, it gets executed; otherwise, it won’t.
- Futures Contracts: An investor orders to buy futures contracts for corn “at the opening” price. Execution occurs if there are matching orders; if not, the order is canceled.
Frequently Asked Questions
What is the purpose of an “At the Opening” order?
The purpose is to execute a trade at the exact opening price of the market to capture the initial market movement.
Can an “At the Opening” order be executed after the market opening?
No, the order must be executed precisely at the opening price or it is canceled.
Is there a risk involved with “At the Opening” orders?
Yes, there is a risk that the order may not be executed if there are no matching trades at the opening price.
Can I modify an “At the Opening” order?
No, once placed, the order is either executed at the opening price or canceled.
What happens if the market does not open on time?
The order remains pending until the market opens and is then subject to execution or cancellation based on the opening price.
Why would someone use an “At the Opening” order?
Investors may use this order to capitalize on market trends predicted to occur at the market open based on overnight news or events.
Are “At the Opening” orders common?
These orders are less common compared to market or limit orders, but are used by traders looking to capture price movements at the exact market opening.
How does an “At the Opening” order differ from a limit order?
A limit order specifies a price cap for the transaction, while an “At the Opening” order specifies execution solely based on the opening market price.
Do all stock exchanges accept “At the Opening” orders?
Most major stock exchanges accept these orders, but policies can vary, so it’s important to check with the specific exchange.
Can I place an “At the Opening” order for multiple securities?
Yes, you can place such orders for multiple securities, but each must be individually specified and submitted to the broker.
Related Terms
Market Order
A market order is an instruction to buy or sell a security immediately at the best available current price.
Limit Order
A limit order is an instruction to buy or sell a security at a specific price or better.
Stop Order
A stop order is an instruction to buy or sell a security once it reaches a specified price, known as the stop price.
Online References
- Investopedia
- Wikipedia - Stock Trading Orders
- Securities and Exchange Commission (SEC) - Trading Basics
Suggested Books for Further Studies
- “A Beginner’s Guide to Stock Market Trading: A Basic Start-Up Guide for Beginners” by Matthew R. Kratter
- “Market Wizards: Interviews With Top Traders” by Jack D. Schwager
- “Reminiscences of a Stock Operator” by Edwin Lefèvre
- “The Intelligent Investor: The Definitive Book on Value Investing” by Benjamin Graham
- “Flash Boys: A Wall Street Revolt” by Michael Lewis
Fundamentals of At the Opening: Trading Basics Quiz
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