I imagine there is a plethora of orders of all types entered before the market opens. How does this hodge-podge of market, limit, stop, stop limit, etc. orders get matched and an opening price decided upon. I imagine this process is somewhat defferent depending on exchange, e.g. NYSE vs NASDAQ. Does anyone know how the opening price is arrived at?
the market makers go out drinking with their buddies every night. they get drunk and throw darts at a page with numbers on it- wherever the darts land is how they determine opening price- what- you mean that you actually thought their is logic behind it?
this is roughly correct, probably enough for our purposes: a. nasdaq, market makers start lining up with bid/ask shortly before premarket opens at 8AM ... when the market opens they go ... it's trading already by the time 9:30 runs around so whatever happens happens and the price at 9:30 is posted to world as the "open" ... but it's hardly that b. NYSE, all the lining up happens in the specialists head also premarket orders are going off on instinet, ecns ... specialist opens it where he thinks supply/demand etc and he can make money c. stock index futures. don't really close just keep trading through the night on Globex ... close on weekends for a bit, then players line up etc d. pit trading, they all scream at each other and the first person to make a trade sets the open ? more or less