Trading after the market closes

[KIWIKARLOS]

Hoping someone can tell me how is it possible for trade to continue after 4pm when the market closes?

Is it orders that were put in before 4 sorting themselves out or some other type of transaction. If so how long after do they trade

 

[nioka]

Hoping someone can tell me how is it possible for trade to continue after 4pm when the market closes?

Is it orders that were put in before 4 sorting themselves out or some other type of transaction. If so how long after do they trade

Brokers continue to register trades until 4.10 PM

 

[3 veiws of a secret]

I querried this situation with Westpac broking in december 2006 i just got so frustrated,and as far as I got to understand it's really a situation granted for all the transactions to be concluded in this window of 10 mins ,nothing more nothing less.
Which then got me thinking why is it hard to pin point the early days trading direction ........it takes at least 10 mins for the trading prices to be loaded onto Westpacs screens.......I have placed orders and they got snapped up only because the info relayed on the screen was inaccurate.....a prick of a lesson but still a positve tease.
I now actively trade once the price gets loaded on my screen.....early bird misses the worm.................
sorry for the ramble back to the BBQ'ed lamb!

 

[SevenFX]

Is this what your looking for Kiwi...

Daily Market Phases

7:00am to 10:00am Pre-opening

SEATS allows the entry of new orders, order amendments, order cancellations. SEATS does not trade orders during pre-opening.

Approximately 10:00am to 10:09am
Opening
Group
Opening Time
Codes

1 10:00 am A - B
2 10:02:15 am C - F
3 10:04:30am G - M
4 10:06:45am N - R
5 10:09:00 S - Z

Approximately 10:09am to 4:00pm Normal Trading

SEATS allows the entry of new orders, order amendments, order cancellations. SEATS executes trades automatically during normal trading.

Approximately 4:00pm to 4:10pm Pre-open prior to Closing

SEATS allows the entry of new orders, order amendments, order cancellations in preparation for the market closing. SEATS does not trade orders at this time.

4:10:00pm +/-30 seconds Closing Single Price Auction

This phase may last between a few seconds and a few minutes depending on the number of orders traded. SEATS does not allow input of orders during this phase. Orders are traded in strict price/time priority.

Cheers
SevenFX

 

[spitrader1]

Hoping someone can tell me how is it possible for trade to continue after 4pm when the market closes?

Is it orders that were put in before 4 sorting themselves out or some other type of transaction. If so how long after do they trade

After the market closes at 4, it goes into Preopen. Meaning bids and offers can be opened into the market, but they do not trade against each other. This goes on for ten minutes untill the CSPA happens. The CSPA is the closing price single auction that happens randomnly anywhere between 4:10:00 and 4:10:59. All bids and offers are traded off against each other in exactly the same formula as the opening, ie, volume weighted average. This used to happen at 4:15, and before that they used to do it at 4:05.

Trades between 4:00 and 5:00 (as in single lines) are more often that not VWAP crossings or facilitation trades.

 

[dubiousinfo]

Hoping someone can tell me how is it possible for trade to continue after 4pm when the market closes?

Is it orders that were put in before 4 sorting themselves out or some other type of transaction. If so how long after do they trade

The same process is followed during the closing auction (4:00-4:10pm) and before the market opens at 10am and before ANY pre-open auction.....ie...usually about 10 mins before a stock resumes after a trading halt for any reason.

The stock market goes into pre-open from 7am during which time anybody can put in whatever bids/offers they like (auction). During pre-open SEATS (Stock Exchange Automated Trading System) then goes thru a 4 stage algorithm to compute the IAP (Indicative Auction Price) based on the mkt depth whenever it changes. The IAP represents what the opening price would be at that particular time based on the current market depth if the stock opened for trading there and then.

At 10am stocks begin trading in alphabetical order. The market is fully open by about 10:08am. When the stock opens for trading, all orders with bids above the IAP and all orders with offers below the IAP are executed at the IAP. The IAP when the stock actually opens becomes the quoted opening price. During pre-open people put in bids above the IAP and offers below the IAP to ensure their orders are executed on opening.

At 4:00pm normal trading stops but again anybody can continue to put in whatever bids/offers they like until 4:10pm, just like in the morning preopen, but the orders aren't executed until 4:10pm. During the 10 mins closing auction SEATS again computes the IAP as above each time the market depth changes. At 4:10pm, for each stock all orders with bids above the IAP and all orders with offers below the IAP are executed at the IAP. In this case the IAP will be the quoted closing price.

I hope this makes sense and helps

 

[markrmau]

Just wanted to add to the good responses so far - there seems to be a common misconception that only brokers can participate in 4-4.10pm close. Of course not. Any one can. Just stick your order to buy BHP at $50, and you will buy at closing price. Or put sell order for BHP at $1 and you will sell at closing price.

 

[Magdoran]

After the market closes at 4, it goes into Preopen. Meaning bids and offers can be opened into the market, but they do not trade against each other. This goes on for ten minutes untill the CSPA happens. The CSPA is the closing price single auction that happens randomnly anywhere between 4:10:00 and 4:10:59. All bids and offers are traded off against each other in exactly the same formula as the opening, ie, volume weighted average. This used to happen at 4:15, and before that they used to do it at 4:05.

Trades between 4:00 and 5:00 (as in single lines) are more often that not VWAP crossings or facilitation trades.

One more little piece of information in addition to spitrader1’s excellent post is that the options market on ASX optionable stocks closes at 4:15 PM, although there are no longer market maker obligations, but you can get set at this time. I have transacted at this time after the match (when the stock CSPA - closing price single auction has transacted).

 

[tayser]

thanks for the explanations guys.

Just looking for some scenarios when people would actually exploit this end of day auction.

For instance, would you say it's a good point to sell based on what the price will be (is the actual price going displayed at any point pre-trade execution? or is luck of the draw?) and the fact that there will be greater volumes of stocks being bought at the same price?

i.e ordinarily there'd be a few people missing out in the example below, correct? however when you have:

stock XYZ.

Buyers Sellers
1000 @ $1.05 2000 @ $1.05
2000 @ $1.00 1000 @ $1.00
3000 @ $0.95 2000 @ $0.95
2000 @ $0.85 3000 @ $0.85

left over from normal trading (or if they're people getting in just after 4pm) - assuming the average turns out to be: $0.96, 8000 stocks will change hands @ that price in the auction? or?

I'm assuming the biggest risk here is that the price will end up lower than what you expected...

I'm in the early stages of formulating strategies and after reading this I immediately thought of that type of scenario where this could be used (not so often), but in a way that has a higher chances of getting you out of your less-than-desirables (or if you genuinely want to get out before the end of the day if you can see that you'll profit well from it).

thoughts appreciated!

 

[nioka]

This thread proves the value of ASF. I have had better answer to this question than I have ever had from a broker or from westpac broking. You learn something new every day.

 

[spitrader1]

thanks for the explanations guys.

Just looking for some scenarios when people would actually exploit this end of day auction.

For instance, would you say it's a good point to sell based on what the price will be (is the actual price going displayed at any point pre-trade execution? or is luck of the draw?) and the fact that there will be greater volumes of stocks being bought at the same price?

i.e ordinarily there'd be a few people missing out in the example below, correct? however when you have:

stock XYZ.

Buyers Sellers
1000 @ $1.05 2000 @ $1.05
2000 @ $1.00 1000 @ $1.00
3000 @ $0.95 2000 @ $0.95
2000 @ $0.85 3000 @ $0.85

left over from normal trading (or if they're people getting in just after 4pm) - assuming the average turns out to be: $0.96, 8000 stocks will change hands @ that price in the auction? or?

I'm assuming the biggest risk here is that the price will end up lower than what you expected...

I'm in the early stages of formulating strategies and after reading this I immediately thought of that type of scenario where this could be used (not so often), but in a way that has a higher chances of getting you out of your less-than-desirables (or if you genuinely want to get out before the end of the day if you can see that you'll profit well from it).

thoughts appreciated!

also note, and its not a direct answer to your question, but big traders will mark the close. Ie, they wil close the market where they want if the volume is lighg enough so they get a mark to market in there favour. Its against ASX rules (window dressing) but its very obivous that it still happens