Why is this practice allowed, i just think it is glorified price fixing on the part of the exchanges. why can't everybody be allowed to buy and sell during normal trading hours. There is nothing like seeing your stock up 1.5% at 16h50 then go -1% at 17h00, just coz some people are trying to manipulate technical signals.
Which stock are you talking about? We can only trade till 5 and the 5pm price is that which is obtained during the closing auction, so can be lower. If company is listed on other stock exchanges, then it can continue to trade wherever and that would influence the local price in Rands.
yes i was talking about the closing auction. it happened to the banks, i think sbk more esp 29 or 30 April i think it was. thanx for the correction Simon, can i have an answer esp from you as you seem knowledgeable on these things.
the closing auctionis designed to remove the potential for manipulating the losing price. And on that score for liquid stocks it works perfectly in that it reflects the market view at 5pm, not just 2 individuals views at 5pm.
is there a site where i can go to to learn about this coz i have no idea what you are talking about right now. i am just not comfortable with a concept that allows for the normal individual to be excluded for a certain time period and "special" entities left to "auction" for the last 10 minutes. is this legal?
anybody can trade in the auction period. At 4.50pm trading halts but orders (buy and sell) can still be entered intot he market, but no trades match. Then at 5.00pm (give or take 30 seconds) the system dertmines which price will see the largest volume, and that's the closing auction trade and the days ruling price.
I am sure there are good reasons for so much trade to take place after the closing bell at 5 o'clock however an example is Impala Platinum that generally trades between 500 million and 1 billion rand in a day. On most days around half of the stock traded is done between the hours of 5 o'clock and 5.30 - during the period that is called the closing action. Yesterday i tried to sell 40 Impala contracts during the auction and placed the order before the closing bell at 5 ' clock. even although the price matched my sell price it did not take my sale. When i enquired by email as to what had happened the reply came back and i quote "as the trade was placed during the closing auction it would only match up to the 5.00pm closing price" I still don't understand that. Why could that trade not be carried over into the action time ?
up, your trade was placed during the auction and was below the closing auction value at 5pm. So it did not match. You can not match a trade after 5pm. After market trades are from 5pm until 6pm. In short they are trades that went through during the day but were only reported to the exchange after the close.