Understanding ASX market trading periods
Many people get confused when it comes to the market trading periods that exist beyond the official ‘opening’ and closing’ times of the ASX
The market goes through a number of phases on any trading day. Many of us are aware that the Australian Securities Exchange (ASX) commences trading at 10:00am and ceases trading at 4:00pm, but are surprised to learn that there are small windows on either side of these times during which one can enter buy or sell orders in the market. In this article, we debunk how trading is conducted across the open and close phases of the ASX.
Market phases (Sydney times)
|7am - 10am
|10am - 4pm
|4pm - 4:10pm
|4:10pm - 4:12pm
||Closing Single Price Auction
|4:12pm - 5pm
|5:00pm - 6:50pm
|6:50pm - 6:59pm
|6:59pm - 7pm
|7pm - 7:30pm
|7:30pm - 2:25am
|2:25am - 7:00am
*Random +/- 15 secs
How it works?
During the pre-open phase (running from 7-10am AEST), orders can be entered into the market but ASX Trade does not trade orders. Rather, buyers and sellers quote the different prices they are willing to accept/pay for their shares.
When the market opens for trading at 10am, the overlapping bids and offers which exist within the market are matched off against each other resulting in an official ‘auction’ price, which is the price at which the stock opens.
Securities open in five groups, according to the starting letter of their ASX code:
- 0-9 and A-B: 10:00:00 am +/- 15 secs
- C-F: 10:02:15 am +/- 15 secs
- G-M: 10:04:30 am +/- 15 secs
- N-R: 10:06:45 am +/- 15 secs
- S-Z: 10:09:00 am +/- 15 secs
The market then trades as usual until 4pm, at which point it enters what is known as ‘Pre-CSPA’ (Closing Single Price Auction). Between 4:00pm – 4:10pm, trading ceases and orders can be entered into the market; existing orders can be amended or cancelled in preparation for the market closing.
At 4:10pm, we have the ‘Closing Single Price Auction’, where ASX Trade calculates the closing prices, applying an algorithm to determine the closing auction price at which any overlapping orders are matched off against each other.
There are other market phases, such as system maintenance’ at 6:59pm – 7:00pm for example, which do not have a significant impact on trading.
The market is effectively in ‘close’ phase overnight, and it all starts again at 7am with the pre-open phase.
For more information, please see http://www.asx.com.au/about/trading-hours.htm