Purpose of after market auction on ASX?

[telstrareg]

Why do we need an after market auction? Why not just have the last sale as the close at 4pm? Does more than one transaction take place? Do people actually try to profit during this period or is there some other purpose?

 

[stoxclimber]

Stop manipulation.

 

[telstrareg]

Anyone care to elaborate?

 

[kaveman]

I believe it was to stop the last minute rush of trades just prior to 4pm. My guess is the large traffic overloaded the ASX system.

 

[bigdog]

I must assume that the after market auction is totally controlled by brokers.

I regulary check the after hour trades for some of my shares and IMO the these sessions provides the opportunity to manipulate the closing share price.

Sales after close and assume controlled by the brokers 1600 to 1610 hours with many sales at 8.46 which is 9 cents lower than the normal close $8.55
16:10:20 8.4600 7,375 62,392.50
16:10:20 8.4600 149 1,260.54
16:10:20 8.4600 565 4,779.90
16:10:20 8.4600 399 3,375.54
16:10:20 8.4600 7,162 60,590.52

Normal close at 1600 hours
15:59:40 8.5500 41 350.55
15:59:40 8.5500 74 632.70
15:59:40 8.5500 26 222.30
15:59:39 8.5600 259 2,217.04 XT
15:59:38 8.5600 16,702 142,969.12
15:59:38 8.5600 1,945 16,649.20

 

[nizar]

I believe it was to stop the last minute rush of trades just prior to 4pm. My guess is the large traffic overloaded the ASX system.

Tend to agree with Kaveman.

Bigdog, you say its controlled by brokers but anybody can participate in this end of close auction. The only main difference between normal market hours and the closing auction is that you just cant put in an at market order, because the market closes at 4pm, you simply put in a limit order, if you a buyer then put it higher than the indicative or make sure its first and you will be filled at the indicative price at 16:10.

Pre-market auction actually opens at 7:00am. I only found this out the other day when i had to put an order in before leaving to work and its only after 7:00am when orders starting coming up on the screen with bids/asks overlapping and an indicative opening price.