Be
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Behind the numbers... / A day at the stock exchange

Overnight and pre-market trading



No trading takes place at night. Here is a “night” order book.
The share price (€10.00) is the closing price of the previous day. As no trade can be registered, order book data do not move up or down.

The share
price 10€
  • Purchase

    Number of orders Number of stocks Proposed purchase price (€)
    5 2000 11.00
    3 1500 10.50
    1 500 10.00
    6 3000 9.70
    1 200 9.50
  • Selling

    Proposed selling price (€) Number of stocks Number of orders
    10.50 1000 4
    11.00 2500 5
    11.30 3000 3
    12.55 1500 5
    13.00 500 1

1 2

As we can see in the 1st row of the order book, there are for instance 1 5 buyers willing to purchase a total of 2000 shares for €11.00 each. There are also 2 4 sellers willing to sell a total of 1000 shares at a price of €10.50 each.

The pre-market phase



During the pre-market phase (07:15 – 09:00), orders are recorded in the order book without any actual trade taking place. Order data can thus be changed, though the share price itself will not vary.

THE SHARE
PRICE10€
  • Purchase

    Number of orders Number of stocks Proposed purchase price (€)
    5 2000 11.00
    3 1500 10.50
    1 500 10.00
    6 3000 9.70
    1 200 9.50
  • selling

    Proposed selling price (€) Number of stocks Number of orders
    10.50 1000 4
    11.00 2600 6
    11.30 3000 3
    12.55 1500 5
    13.00 500 1

1

1 Sell 100 stocks at €11.00 each (2500 + 100)

THE SHARE
PRICE10€
  • Purchase

    Number of orders Number of stocks Proposed purchase price (€)
    5 2000 11.00
    4 1700 10.50
    1 500 10.00
    6 3000 9.70
    1 200 9.50
  • Selling

    Proposed purchase price (€) Number of stocks Number of orders
    10.50 1000 4
    11.00 2600 6
    11.30 3000 3
    12.55 1500 5
    13.00 500 1

2

2 Buy: 200 stocks at €10.50 each (1500 + 200)

THE SHARE
PRICE 10€
  • Purchase

    Number of orders Number of stocks Proposed purchase price (€)
    5 2000 11.00
    4 1700 10.50
    1 500 10.00
    6 3000 9.70
    1 200 9.50
  • Selling

    Proposed selling price (€) Number of stocks Number of orders
    10.50 1000 4
    11.00 2600 6
    11.30 3500 4
    12.55 1500 5
    13.00 500 1

3

3 Sell: 500 stocks at €11.30 each (3000 + 500)

THE SHARE
PRICE10€
  • Purchase

    Number of orders Number of stocks Proposed purchase price (€)
    5 2000 11.00
    4 1700 10.50
    1 3000 10.30
    1 500 10.00
    6 3000 9.70
    1 200 9.50
  • Selling

    Proposed selling price (€) Number of stocks Number of orders
    10.50 1000 4
    11.00 2600 6
    11.30 3500 4
    12.55 1500 5
    13.00 500 1

4

4 Buy: 3000 stocks at €10.30 each (0 + 3000)

Start of trading



Initial fixing takes place at 09:00. This sets a stock’s opening price, i.e. the price at which trading begins. To determine it, the price at which the maximum number of stocks may be traded is calculated.

This is done via the order book, using its status at the end of the pre-market period:

THE SHARE
PRICE 10€
  • Selling

    Number of orders Number of stocks Proposed purchase price (€)
    5 2000 11.00
    4 1700 10.50
    1 3000 10.30
    1 500 10.00
    6 3000 9.70
  • Purchase

    Proposed selling price (€) Number of stocks Number of orders
    10.50 1000 4
    11.00 2600 6
    11.30 3500 4
    12.55 1500 5
    13.00 500 1

In our case, we thus have:

  • Purchase

    Number of orders Number of stocks Proposed purchase price (€)
    5 2000 11.00
    4 1700 10.50
    1 3000 10.30
    1 500 10.00
    6 3000 9.70
  • Selling

    Proposed selling price (€) Number of stocks Number of orders
    10.50 1000 4
    11.00 2600 6
    11.30 3500 4
    12.55 1500 5
    13.00 500 1

1

At a price of €9.70:

  • 1 on the buying side: 3000 (€9.70) + 500 (€10.00) + 3000 (€10.30) + 1500 (€10.50) + 2000 (€11.00) = 10,000 shares
  • on the selling side: 0

Maximum number of shares likely to be traded: 0

The same applies at prices of €10.00 and €10.30.

but at a price of 10.50€,

  • Purchase

    Number of orders Number of stocks Proposed purchase price (€)
    5 2000 11.00
    4 1700 10.50
    1 3000 10.30
    1 500 10.00
    6 3000 9.70
  • Selling

    Proposed selling price (€) Number of stocks Number of orders
    10.50 1000 4
    11.00 2600 6
    11.30 3500 4
    12.55 1500 5
    13.00 500 1

2 3

  • 2 on the selling side : 1700 (10,50€) + 2000 (11,00€) = 3.700 shares
  • 3 on the buying side : 1000

Maximum number of shares likely to be traded: 1000

At a price of 11,00€,

  • Purchase

    Number of orders Number of stocks Proposed purchase price (€)
    5 2000 11.00
    4 1700 10.50
    1 3000 10.30
    1 500 10.00
    6 3000 9.70
  • Selling

    Proposed selling price (€) Number of stocks Number of orders
    10.50 1000 4
    11.00 2600 6
    11.30 3500 4
    12.55 1500 5
    13.00 500 1

4 5

  • 4 on the selling side : 2000
  • 5 on the buying side : 1000 (10,50€) + 2600 (11,00€) = 3600 shares

Maximum number of stocks likely to be traded: 2000

We also see that, for the other selling prices proposed, there are no buyers. Therefore, the maximum number of shares likely to be traded remains at 0. There is no point in continuing with the calculations.

Conclusion: the starting price for the share will be €11.00 as that is the price at which most shares will be traded. We thus see that the opening price is not always the previous day’s closing price.

At the moment the bell is rung, the order book will be as follows:

The share
price 11€
  • Purchase

    Number of orders Number of stocks Proposed purchase price (€)
    5 2000 11.00
    4 1700 10.50
    1 3000 10.30
    1 500 10.00
    6 3000 9.70
  • Selling

    Proposed selling price (€) Number of stocks Number of orders
    10.50 1000 4
    11.00 2600 6
    11.30 3000 3
    12.55 1500 5
    13.00 500 1

The session



If the stock is not very liquid (i.e. there are not many sell or buy orders), the quoted price will be set at the fixing, i.e. the price is determined just once or twice a day.
For other stocks, the prices change continually.

A trading session lasts from 09:00 until 17:30. Outside these hours, any new order is checked against available orders in the order book to see whether a trade is possible.

The share
price 11€
  • Purchase

    Number of orders Number of stocks Proposed purchase price (€)
    0 0 11.00
    1 500 10.50
    1 3000 10.30
    1 500 10.00
    6 3000 9.70
  • Selling

    Proposed selling price (€) Number of stocks Number of orders
    10.50 0 0
    11.00 600 2
    11.30 3000 3
    12.55 1500 5
    13.00 500 1

1

1 At the start of trading, possible trades (in our case those at €10.50 and €11.00) are carried out. The price quickly rises from €10.50 (initial price) to €11.00.

The share
price 11€
  • Purchase

    Number of orders Number of stocks Proposed purchase price (€)
    1 500 10.50
    1 3000 10.30
    1 500 10.00
    6 3000 9.70
  • Selling

    Proposed selling price (€) Number of stocks Number of orders
    11.00 600 2
    11.30 3000 3
    12.00 1000 1
    12.55 1500 5
    13.00 500 1

2

2 One selling order (1000 stocks at €12.00) is left over: with no buyer willing to pay €12.00, the trade is put on hold.

The share
price 12€
  • Purchase

    Number of orders Number of stocks Proposed purchase price (€)
    1 500 10.50
    1 3000 10.30
    1 500 10.00
    6 3000 9.70
  • Selling

    Proposed selling price (€) Number of stocks Number of orders
    11.00 600 2
    11.30 3000 3
    12.00 500 1
    12.55 1500 5
    13.00 500 1

3

3 One buy order for 500 stocks at a price of €12.00 is left over: the trade takes place for the 500 stocks, while the remaining 500 remain available for sale at €12.00. The price is now set at €12.00.

This goes on throughout the day, but at the speed of lightning.

Close of trading



During post-market trading (17:30 – 17:35) orders are recorded in the order book without any trade actually taking place. This moment allows the closing price to be calculated.

As with the price fixing at the start of trading, the closing fixing (17:35) represents the price at which the maximum number of stocks can change hands. This is the price that will be quoted in the overnight order book.

Finally, what is called “trading at last” takes place between 17:35 – 17:40. During these last 5 minutes, all orders are accepted and executed exclusively at the night price. This fixes the overnight order book.

Risk and keeping a cool head

It can’t be said often enough: risk is an inherent element to any stock market investment. But it will often pay off when one takes a longer-term perspective. As long as one follows a few basic rules – expert assessments, diversification, etc. – and keeps a cool head. These four short films will help you get a better idea of what it’s all about.

Plan 1 2 3 4 5
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