In order for you to be successful in the stock market, it is important for you to understand all aspects of it. There is a flurry of activity that occurs before the exchange opens and when it closes.
It is very interesting to see what happens after the stock market close. After the close, there are many orders that gather until opening the next day.
Many people trade on websites where the ability to buy and sell is open all day, every day. Therefore people have the ability to take a look at how their stock was doing that day, and then make the decision to buy or sell.
Once this order is made, it will have to wait until opening. The great thing is that people can initiate these transactions even after the stock market close. There are actually millions upon millions of people who do this every day.
Even if the stock market itself is close, transactions can still be made. This is very essential in this day of electronic transactions. It can seem very hectic to deal with all of these new orders at the opening of the market. The solution has been to develop what is called an opening cross.
A computer analyzes all the orders or trades and comes up with a best price for opening. This computer can also pick up on a problem such as having more orders to sell than to buy. This information is disclosed in order to offsets the balance.
People are able to make orders right before opening, and then the problem is usually fixed. There will always be a time when a stock market close announcement may throw things off balance. Either a company made a very good announcement and people are jumping to buy that stock, or the company made a bad announcement and people are trying to dump it.
The market has had to come up with a fair solution because of all that happens even after the stocks close. Even though the hours of the stock market are listed, there is still a lot to be done during close and right before opening.
If you want to invest in the stock market, understand how the stock market close prices and what happens after closing affects the market. Any announcements made by the company could mean a jump or dip in the price of the stock. Even though hours are posted with a beginning and an end, the stock market never truly sleeps.