mgsontour Posted June 5, 2019 Report Share Posted June 5, 2019 Hi everyone, I wonder if anyone knows what/who triggers the 'initial' movement of a share price at the beginning of trading? The reason I ask is that a particular share price can spike or drop between the hours the market is closed and is only known to us mere mortals at the opening, given the fact there has more often than not been no breaking news or financial statements I can only conclude some fund software or a broker marks the price up/down to protect themselves; I look forward to hearing ideas/conclusions. Thanks in advance Quote Link to comment Share on other sites More sharing options...
sitsinhedges Posted June 5, 2019 Report Share Posted June 5, 2019 I believe the movement is based upon who is buying or selling throughout the day. This is easily tracked in realtime as it happens at any point . Quote Link to comment Share on other sites More sharing options...
SpringDon Posted June 5, 2019 Report Share Posted June 5, 2019 Futures and options on futures. Quote Link to comment Share on other sites More sharing options...
grrclark Posted June 5, 2019 Report Share Posted June 5, 2019 (edited) Trading is pretty much 24 x 7 on various exchanges around the world and trades can be placed in advance of any particular market opening. So let’s say at the start of trading in Singapore, 8hrs before London opens, there is news that might unfavourably impact on the Japanese Yen, lots of automated trading systems, or manual instruction, places lots of sells in the queue for London, either in currency trades or in funds, banks, companies that have exposure to a change in the strength of the Yen. As the market opens in London the number of sells immediately posted will drop the value of those stocks immediately. Depending on how those stocks influence the overall value of that particular market will determine the opening value too. Although the particular market is not open to trading there is always consideration of the global market. Then there is things like the overnight lending rate between banks that will influence the opening position. Edited June 5, 2019 by grrclark Typos - as ever. Useless thumbs Quote Link to comment Share on other sites More sharing options...
Salmo Posted June 6, 2019 Report Share Posted June 6, 2019 The market makers play a large part in it ..... if it’s AIM then god only knows Quote Link to comment Share on other sites More sharing options...
RockySpears Posted June 6, 2019 Report Share Posted June 6, 2019 3 hours ago, Salmo said: The market makers play a large part in it Market! Haaa Haaa Haaa. Ponzi scheme you mean. The only "Market Makers" are the Central Banks handing out the sweets. Simple explanation of my sceptisism: TESLA, Netflix, UBER. These companies are valued at billions, yet have never made a penny. They are of zero investment value as they continue their cash burns. TESLA currently get through around $200 million dallars a quarter (which is down from around $1 billion a quater in 2018), but people buy Tesla. Netflix got through $1.32 billion in Q4 2018 and has been negative cash flow since Q3 2014, but people buy Netflix. Uber just burned over $1 billion with revenue of £3.1 billion , a 20% increase in previous revenue. More revenue = higher losses! (maybe they are trying to make it up on volume) But people still buy their shares. ( as reported in the Guardian: https://www.theguardian.com/technology/2019/apr/11/uber-to-share-intimate-details-about-company-ahead-of-going-public but that only makes it funnier) The whole of the "Stock 'Market' " is massively over-bought, hugely inflated due to the unintended, but entirely foreseable, buybacks that companies are making using Quantative Easing. Instead of taking QE and building new facilities or investing in their businesses, companies have turned debt into share price, the company is not "worth" more, it does not produce more or have greater assets. Indeed, companies are more indebted, with aging facilities and systems. Watch out below. RS Quote Link to comment Share on other sites More sharing options...
blackbird Posted June 6, 2019 Report Share Posted June 6, 2019 (edited) As my account brother in-law puts it “the London stock exchange is nothing more than a glorified betting shop” 😀 Edited June 6, 2019 by blackbird Quote Link to comment Share on other sites More sharing options...
Salmo Posted June 6, 2019 Report Share Posted June 6, 2019 And virtually unregulated Quote Link to comment Share on other sites More sharing options...
mgsontour Posted June 6, 2019 Author Report Share Posted June 6, 2019 Thanks everyone and appreciated. . . If these trades ( whether executed or not, timed for opening, a future, derivative etc ) have a 'price' when the market is closed. . . . How can I see that price of say Barclays & Vodafone during our hours of darkness as these are 2 that have been pretty active today and are on the main index? Thanks again Quote Link to comment Share on other sites More sharing options...
grrclark Posted June 6, 2019 Report Share Posted June 6, 2019 18 minutes ago, mgsontour said: Thanks everyone and appreciated. . . If these trades ( whether executed or not, timed for opening, a future, derivative etc ) have a 'price' when the market is closed. . . . How can I see that price of say Barclays & Vodafone during our hours of darkness as these are 2 that have been pretty active today and are on the main index? Thanks again You can’t and nobody else can either, otherwise the market is rigged. What you can do is monitor trading around the world and if Barclays or Vodafone were listed on multiple markets then you could follow that. Otherwise you do what all the traders do and take a punt, based on all the facts you know about Barclays and Vodafone you can place a buy, or sell, on that stick at whatever price you think is right. So let’s say you think Vodafone is going to dip 15p in early trading and recover 10p back again later, so a difference of 5p less than yesterdays trading price then you could set your buy price at 12p below the closing value, folk would sell at that and when the market rebounds later you would make 7p profit. Of course you could get it wrong and buy at your 12p less and the stock continues to tumble to 25p less so you are 13p worse off. Or the opposite, using the same numbers, if you already have shares and want to sell, do you sell to the guy offering 12p less because you think it’s going to drop to 25p less so getting out at -12p is better, or do you hold your nose and not sell at all until it recovers to just the 5p less. Traders use complex automated algorithms to work out buy and sell prices and automate their trades based on the market movement after it opens, based on the volume of trades, whether those are buy or sell and the stock value. On some trades it is heavily influenced by total percentage of issued shares in a single trade. The stock market is not the ponzi scheme that some claim, but it isn’t without manipulation either. It has improved markedly since the financial crash of 2008 with the separation of the traditional banking and investment (casino) banking by the very large players. It is also very heavily regulated, but of course not free of abuse. Quote Link to comment Share on other sites More sharing options...
mgsontour Posted June 6, 2019 Author Report Share Posted June 6, 2019 22 minutes ago, grrclark said: You can’t and nobody else can either, otherwise the market is rigged. What you can do is monitor trading around the world and if Barclays or Vodafone were listed on multiple markets then you could follow that. Otherwise you do what all the traders do and take a punt, based on all the facts you know about Barclays and Vodafone you can place a buy, or sell, on that stick at whatever price you think is right. So let’s say you think Vodafone is going to dip 15p in early trading and recover 10p back again later, so a difference of 5p less than yesterdays trading price then you could set your buy price at 12p below the closing value, folk would sell at that and when the market rebounds later you would make 7p profit. Of course you could get it wrong and buy at your 12p less and the stock continues to tumble to 25p less so you are 13p worse off. Or the opposite, using the same numbers, if you already have shares and want to sell, do you sell to the guy offering 12p less because you think it’s going to drop to 25p less so getting out at -12p is better, or do you hold your nose and not sell at all until it recovers to just the 5p less. Traders use complex automated algorithms to work out buy and sell prices and automate their trades based on the market movement after it opens, based on the volume of trades, whether those are buy or sell and the stock value. On some trades it is heavily influenced by total percentage of issued shares in a single trade. The stock market is not the ponzi scheme that some claim, but it isn’t without manipulation either. It has improved markedly since the financial crash of 2008 with the separation of the traditional banking and investment (casino) banking by the very large players. It is also very heavily regulated, but of course not free of abuse. Great words; thank you. I have played the stock market for many years in different ways and the morals/ethics I learnt don't seem to exist these days ( I showed an interest in the markets as a young man and my father bought me the FT paper one Saturday and a book called 'how to read the FT' ) and I started trading back in 1989 with local PLC's I knew something about) I have obviously learnt a lot along the way and what interests me in todays markets are not so much the fundamentals but the feeding frenzy I see which I recon is driven by momentum! So in a nutshell I'm not a professional but feel I'm missing a trick during the night and what I'm after is to look at a share price prior to opening and jumping on the wagon; the way I see it is by the time us mere mortals see the opening prices, the cream of the milk is lost. . . can we not get in on the action ( obviously such a platform would come via a subscription )? Quote Link to comment Share on other sites More sharing options...
oowee Posted June 6, 2019 Report Share Posted June 6, 2019 I use Simply Wall Street (subscription but you can try it for free) for analysis and my trading platform (AJB) for background. The average of broker tips is equal to the average of the market. With your own punts you are not paying fees so should start quids in 🙂 Quote Link to comment Share on other sites More sharing options...
SpringDon Posted June 6, 2019 Report Share Posted June 6, 2019 If you believe that you are losing out by waiting for market open and you know which way certain shares are going then try spread betting as they can be set outside trading hours. Quote Link to comment Share on other sites More sharing options...
grrclark Posted June 6, 2019 Report Share Posted June 6, 2019 MGS, the big boys don’t see anything other than the closing price of the night before either, there is no inside track. They use automated trading platforms with algorithms that react faster than you can to the movement of stocks after the market starts moving, not before. The folk who are instructing the sell or buys just have more knowledge of other things that will impact on certain stocks or market verticals. If you are playing on the basis of the number alone then you are miles behind the curve. As you said, you started with local listed businesses that you knew, so stick with that or pick a particular segment and focus on that. Understand general market trends, market sentiment, what external influencers politically or geographically, what will the weather do, what season of the year, what currencies they trade in, what their markets are vulnerable to or influenced by. What are the announcements the company makes, how predictable are their results, how stable is the management team, how stable is their supply chain, etc. That’s what the professional traders know. Quote Link to comment Share on other sites More sharing options...
Mungler Posted June 7, 2019 Report Share Posted June 7, 2019 Or follow Bobby Axelrod and be ready to bung inside sources large amounts of cash for the market moving scoops. As for Tesla, Netflix and Uber it’s clear the market is excited by what the future holds for these companies, but yes there’s a whiff of the dot-com nonsense with a hint of Theranos in there 😆 Quote Link to comment Share on other sites More sharing options...
sitsinhedges Posted June 7, 2019 Report Share Posted June 7, 2019 Just buy index funds and find something else to worry about 😀 Quote Link to comment Share on other sites More sharing options...
mgsontour Posted June 7, 2019 Author Report Share Posted June 7, 2019 A deep thank you to everyone's contribution, I just thought I was missing something and always willing to learn; again thanks lads Quote Link to comment Share on other sites More sharing options...
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