When investors plan to buy or sell shares they typically spend time deciding on the right share and the right price. Anyone who has checked buy and sell quotes for a stock immediately before the market opens, or just after it closes, could be forgiven for thinking they had entered an investors' twilight zone. For example, if you check the buy and sell quotes between 7am and 10am it is fairly common to see sellers offering their shares for less than buyers are prepared to pay.
Trading begins and an opening price is quoted, then the price jumps or falls inexplicably.
The market is not rigged, it is just a reflection of the way the Australian Stock Exchange calculates opening and closing prices. It is worth taking the time to understand this fairly complex procedure before you place an order to buy or sell shares. These orders are placed in a queue according to price and time received. For example, buy orders are ranked from the highest price to the lowest while sell orders are ranked from the lowest price to the highest, down two parallel columns. If the buy offer is higher than the sell offer, however, the orders are matched from the top of the list down until a buy price below the sell price is reached.