I wanted to short asian futures before they went down.... but got in too late since the futures market was closed... all of a sudden, the market opens lower... can someone explain how does price shift lower if the futures market is closed? Am i suppose to put in an order before the market opens? if so, is there any chance that if i did put an order before the market opened, that i would get the inbetween price of the previous futures closed price and the open price? i just don't get how price can move if the market isn't yet open.
I don't know about the "Asian futures" markets (could you get any more vague?), but if they are like some "Europe futures", there may be a pre-opening phase and a "netting period" within that phase. It is during the netting period that opening prices are determined. In the case of Europe, the opening price is determined by the maximum executable order volume. Osorico
I guess the question is who brings the prices down or up when the futures market isn't even open yet? how can the futures price move if there are no trades while the futures market was closed? does the new opening price correlate to something specific?
Just because the market isn't open doesn't mean folks just like you aren't entering fresh orders at all hours ... opening prints reflect matching of the latest order information.
While the market is closed, news happens. This news affects the traders in that market; they revise their views as to what the going price should be, and enter orders accordingly. This accounts for the price discontinuity. As to your second question, this depends on the market, how your broker holds your orders, etc. Bottom line is you need to investigate these questions via your broker and get answers you can depend on. Never trade with such a lack of knowledge--you are simply disadvantaged and throwing money away.
are you trying to say that it is possible to put an order even when the futures market is closed? which would mean that the opening price also reflects orders that were put in while the market was closed....??
Ummm, yeah. Its like every other equity market. You can put in an order before the open. All the orders at the open of the market determine the opening price. When there's a severe imbalance in the price, the open adjusts up. You've seen gap ups and down before, right?
Which asian market are you talking? China? The only thing you can short is the FXI, it has options, but doesn't have futures. Market makers lower/rise opening prices according to pending orders.
If you are talking about the HSI, there is a preopening matching of trades 15mins before trading begins where premarket orders are matched and possibly filled(depends on matches). So when the market opens, price is already reflective of the market situation. You can check the hkfe website for premarket order flow documentation and explanations.