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The price of securities referred to by the media are usually their closing price, or last trading price when the market's regular session ended. But investors and traders are generally more interested in the opening price, which often varies from closing due to electronic trading,[1] as a better predictor of short-term price movement.
First watch
Since the advent of global, 24-hour capital markets, closing price has become less reliable as a benchmark for a security's trading demand whereas opening price incorporates all after-hours market sentiments.[2] All intraday market movements and securities' closing prices are benchmarked against the opening price. The power of opening prices as an analytical short-term trading tool has even been dubbed the "Opening Price Principle", also the title of a popular trading book on the subject.[3]
References
- ↑ Closing Price. SEC.
- ↑ Opening Price. Investopedia - Forbes Digital.
- ↑ Opening Price Principle: Best Kept Secret on Wall Street. Amazon.com.
