If there are overnight and early morning news to react to, yes the pre market itself will have big moves. Don’t know if this is the question you are trying to ask.
In premarket they decide the opening price based on orders received from 9:00 to 9:07 am.
Example: if some stock’s yesterday closing price is say 811.5. In premarket say
156 people have placed matching orders to buy and sell at 820
120 people have placed matching orders at 814
85 people have placed matching orders at 806
Then the maximum number of matching orders is at 820, since it satisfies 156 people.
So the opening price of today will be 820.
There is huge gap in yesterdays closing price 811.5 and todays opening price 820.
Same is true if in addition to above mentioned orders
216 people have placed matching orders at 801.5
then opening price will be 801.5 with a huge gap at the bottom side.
Hope you understand now.
ok… does any buying and selling takes place during that time?
thank you aastro guru…