When a Stock Goes into 'Pre-open'
A contract to buy or sell a particular product in the financial market is called an option. The financial instrument in equity options are the stock shares, an exchange traded fund or ETF, or other similar financial products. In an option, there is a specific price established, where the contract will be based, and this is with an expiry date of which if the option expires, there will no longer be a value on this option. Buying and selling of options can be made, and these are the "calls" and "puts" option types where traders will decide which to do share trading. Investors and traders of options will make decisions based on what they want to achieve in options trading.
When traders are always caught off guard Share market, they would naturally be unable to trade in the best manner possible. Ultimately, it would be the stock market itself that would be badly affected. However, a stock could be declared as 'pre-open'. This means that trading for that particular stock is stopped. A 'pre-open' stock is not a strange or unique phenomenon in share trading though. In fact, it happens on a daily basis. Before the opening of the stock market, it is normal for all stocks to be in a 'pre-open' mode. It is during the said stage that the buyers could make changes in their orders while the sellers may also make amendments on the prices.
Due to the fact that the 'adjust' phase is a very volatile period, it is only right that no orders should be placed in the stock market. Even those that are done through on-line trading are no longer allowed. Actually, there may be no need for stock traders to be told that orders should be halted during this phase. Because of the risks posed during this stage, it would be foolish indeed for trading to be conducted. However, there are also reasons why there has to be an enforced stoppage. Sometimes, there are traders who would unscrupulously try to engage in trading because they feel that they could take advantage of the situation.
It is hard to imagine how it would be if there is no 'pre-open' phase at all Shares. Without this, there would surely be trouble among the traders themselves. Actually, everyone engaged in the stock market could be at a loss. In fact, there may be no winners in this respect. This means that the stock market would not be in a good condition.
When the option is also not exercised because prices are low and thus will expire, the option can become worthless and the stocks will go back to the options holder. Because supply and demand has big effects on the premium prices of options, on-line trading on the options market can be very complicated and only the knowledgeable should do this.
When traders are always caught off guard Share market, they would naturally be unable to trade in the best manner possible. Ultimately, it would be the stock market itself that would be badly affected. However, a stock could be declared as 'pre-open'. This means that trading for that particular stock is stopped. A 'pre-open' stock is not a strange or unique phenomenon in share trading though. In fact, it happens on a daily basis. Before the opening of the stock market, it is normal for all stocks to be in a 'pre-open' mode. It is during the said stage that the buyers could make changes in their orders while the sellers may also make amendments on the prices.
Due to the fact that the 'adjust' phase is a very volatile period, it is only right that no orders should be placed in the stock market. Even those that are done through on-line trading are no longer allowed. Actually, there may be no need for stock traders to be told that orders should be halted during this phase. Because of the risks posed during this stage, it would be foolish indeed for trading to be conducted. However, there are also reasons why there has to be an enforced stoppage. Sometimes, there are traders who would unscrupulously try to engage in trading because they feel that they could take advantage of the situation.
It is hard to imagine how it would be if there is no 'pre-open' phase at all Shares. Without this, there would surely be trouble among the traders themselves. Actually, everyone engaged in the stock market could be at a loss. In fact, there may be no winners in this respect. This means that the stock market would not be in a good condition.
When the option is also not exercised because prices are low and thus will expire, the option can become worthless and the stocks will go back to the options holder. Because supply and demand has big effects on the premium prices of options, on-line trading on the options market can be very complicated and only the knowledgeable should do this.
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