How does a stock market open weak. just wanna a know how its low before the trading starts?

Question

Pls clarify. why is that market doesnt open at the previous days close...who or what factors fixes the opening.

Answer 1

With global trading environments, stocks are listed on multiple stock exchanges. So, while one particular exchange is closed, the stocks could be traded in another part of the world, where the markets are open. This allows for continuous change of prices.

Further, the prices displayed at any given time on the market is the price at which the last trade was made. There is a possibility (eg. due to bad news about the company being published overnight) that the last trade is much higher than what any investor is willing to pay. So the first trade would be significantly lower than the last trade of the previous day. This would lead to a weak opening.

Answer 2

Nahsaur and Nick are both right.

Our large stocks trade all over the world and during the business week that means almost 24 hours a day.

Then there are electronic markets that can match some buy and sell orders "after hours".

Plus people can put in option orders, limit orders, pending orders,  that can change the price when the major market opens.

But one thing to consider is that it is really not "A stock market" but a "market for individual stocks".

While we might look, track, and even invest in the total in the index, in reality that index is the aggregate sum of all the individual movements of individual stock, the companies.

And things can change for the companies or a sector overnight. Like oil rising overnight with trading in Europe or Asia might hurt airlines and they will open lower. Or a company may have reported earnings after it closes trading here so it may open higher or lower the next day.

For the most part, the easiest,  they tend to look at the index futures to see where the market is going to open.  

Bottom line we are a global economy, global market, and business and world operates 24/7.

It is always happy hour someplace. (grin)

Answer 3

The quoted price of any stock is the price at which it was sold last time.  But there is no reason why people have to buy and sell at the quoted price next time.  

People are free to bid as low as they want.  And people are free to ask as high as they want.  But shares are sold only when the bidding and the asking prices coincide.

When there are some bad economic news.  Then both the buyers and the sellers bring down their prices.  And sales happen at a lower price.  

When the market is closed, traders put in buy limit, sell limit, buy stop, and sell stop orders at various prices.  All of these orders become effective when the market opens.  But only those buyers and sellers whose orders coincide in price will have their orders executed.  And once some shares are sold at a certain price.  Then this becomes the new price of the stock.  And this price can be quite a bit higher or lower than the previous selling price.