How people place trades and gets excuted at sharp market opening

General
1

seen many times… at sharp 09:15:01 as soon as market opens the trades start to get executed. but after trying many times… even after placing after market hour order iam not able to participate in that opening rush?

a) how do they do it?

b) how do i do it?

2 Likes
2

Orders always get executed in price, time priority meaning, if its a buy order, orders having the highest bid gets executed first and if its a sell order, orders having the least offer get priority in execution.

In case 2 orders with the same price enter the system, then the order first received gets priority.

Trades get executed when the bid and the offer match. I don’t think its possible to ensure that your order gets executed first or gets executed at the market opening.

2 Likes
3

Some theoretical possibilities

  1. There are HFT and algo trades happening from Co-located servers. These have the fastest execution time. Check http://www.nseindia.com/technology/content/tech_intro.htm.
  2. Then there are trading members with direct connectivity to exchange allowing faster execution. Check http://www.nseindia.com/membership/content/connectivity.htm
  3. For retail traders the order has to go through broker, get validated for margin requirements and other risk management processes before this is submitted to exchange. Even though the above process is automatic, there would be some delay.
  4. Even if retail trader uses very fast internet connection, it has to pass through various routers. Open a command prompt window and type “tracert” follow by any websites ip address. You will know what I mean. e.g. tracert 74.125.236.146 (www.google.com’s ip address).

So the difference between retail traders order execution and the 1st 2 categories would be like driving through city and driving on express way.

Now even if one were to submit market order, it could be in huge queue due to -

  1. Most of the category 1 and 2 place market orders.
  2. All the “after market orders” with price type market from all the broker gets submitted at market opening.
  3. Also some of the limit “after market orders” could get behave like market if price opens very favorable.

Remember the above are only theoretical possibilities.

Having said that, most of the time price does come back in its opening range any time during the day. So one should be able to enter at similar price later during the day unless one wants to catch the initial movement which is very difficult to.

6 Likes
4

My after market orders execute within first 10 seconds of market opening. (Market orders)

I dont see any problem.

As Venu said, the orders are executed purely based on price-time priority.

There could be small delays in getting your order to the exchange. (Usually will be the first 10 seconds, most of the time would be within first 5 seconds).

Alternatively, you can place a market order in the limit/market order in the PreOpen session and get priority over all AMO orders, you need to place an order exactly at 9:00:01 am.

This is will increase the chances multifold that your order executes sharp exactly at 9:15 am

5

Even, I had the same query, how to execute trades at market(NSE) opening?