# ASX Pre-Open



## MovingAverage (13 November 2020)

Happy Friday all,
In the many years I've been trading I've never bothered to look at the market depth during pre-open (it's not relevant to my approach to trading), but this morning I had a little time to waste so thought I'd watch the pre-open orders stack up from around 9.30am. I was offloading SUL this morning and noticed that from around 9.45am a whole bunch of trivial sell orders started to be placed. Trivial because the volume for these orders were for about anywhere between 4 to 15 and they seemed to be for progressively lower priced sell prices. As I noticed these orders being placed the cynic in me thought this looks like someone trying to drive down the IAP (price hunting). Like I say, I never pay close attention to pre-open activity, but is this practice of placing trivial pre-open orders a common practice (presumably by insto's) to "manipulate" the open trades?
Stay classy ASF
MA.


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## Joules MM1 (15 November 2020)

MovingAverage said:


> Happy Friday all,
> In the many years I've been trading I've never bothered to look at the market depth during pre-open (it's not relevant to my approach to trading), but this morning I had a little time to waste so thought I'd watch the pre-open orders stack up from around 9.30am. I was offloading SUL this morning and noticed that from around 9.45am a whole bunch of trivial sell orders started to be placed. Trivial because the volume for these orders were for about anywhere between 4 to 15 and they seemed to be for progressively lower priced sell prices. As I noticed these orders being placed the cynic in me thought this looks like someone trying to drive down the IAP (price hunting). Like I say, I never pay close attention to pre-open activity, but is this practice of placing trivial pre-open orders a common practice (presumably by insto's) to "manipulate" the open trades?
> Stay classy ASF
> MA.



 ......if trivial then how does something trivial manipulate price direction ?
how do you know what the price direction is going to be  (in either direction) going forward, how would you quantify that distance if the trivial volume did affect the auction ?


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## qldfrog (15 November 2020)

Joules MM1 said:


> ......if trivial then how does something trivial manipulate price direction ?
> how do you know what the price direction is going to be  (in either direction) going forward, how would you quantify that distance if the trivial volume did affect the auction ?



The opening price is a _secret_ formula, i suspect anyone with its knowledge can reverse engineer to achieve manipulation
The estimate opening price displayed obviously affects orders placed in the last 30 min before opening, so is as subject to manipulation as open market, maybe even more as it is of non cost to the manipulator as you can cancel your orders just before the actual open


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## MovingAverage (15 November 2020)

Joules MM1 said:


> ......if trivial then how does something trivial manipulate price direction ?
> how do you know what the price direction is going to be  (in either direction) going forward, how would you quantify that distance if the trivial volume did affect the auction ?



Ok poor choice of word in trivial, but what else do you call an order for 4 share at $9.50? The point I was trying to make was that there were a whole bunch of these orders with progressively lower prices, e.g 4 shares at $9.50, 3 shares at $9.48, 5 shares at $9.47, 4 shares at $9.45 and so on.


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## MovingAverage (15 November 2020)

qldfrog said:


> The opening price is a _secret_ formula, i suspect anyone with its knowledge can reverse engineer to achieve manipulation
> The estimate opening price displayed obviously affects orders placed in the last 30 min before opening, so is as subject to manipulation as open market, maybe even more as it is of non cost to the manipulator as you can cancel your orders just before the actual open



I didn’t think it was secret—I found plenty of detail about the process. What aspect is secret?


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## qldfrog (15 November 2020)

MovingAverage said:


> I didn’t think it was secret—I found plenty of detail about the process. What aspect is secret?



Sure so very happy what is the exact formula?
I once got refused an at open order:
The broker told me it was basically outside allowed range: i ask what is the mathematical formula to know what i could ask offer and the reply was it was information kept secret
Is it just a volume weighted price average? I do not think so,what is accepted/ rejected
As far as i could see at the time, this remains a mystery black box but keen to know more


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## MovingAverage (15 November 2020)

qldfrog said:


> Sure so very happy what is the exact formula?
> I once got refused an at open order:
> The broker told me it was basically outside allowed range: i ask what is the mathematical formula to know what i could ask offer and the reply was it was information kept secret
> Is it just a volume weighted price average? I do not think so,what is accepted/ rejected
> As far as i could see at the time, this remains a mystery black box but keen to know more



I’ve had pre-open orders (sells) rejected basically because the price was too low—not massively low just around 3-4% below the prior close. My thought was that these extremely small orders (I called them trivial, but that’s not appropriate) were to try and drive down the price and avoid a later order being rejected. What I noticed on Friday is all of those very small orders coming in at progressively lower prices  and then almost right on open a big order came in and was placed at the head of the queue.


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