An at-the-opening-order is a type of trading order that is issued by an investor to an agent or broker to execute a buy or sell of an asset at the time the market opens for the beginning of a new trading day. Typically, this approach will include a price range that is acceptable to the investor to use as a guideline for the purchase or sale. The goal is to execute the trade as soon as the market opens, before there is a chance for any events to trigger much movement on the price of the asset in question. While is it possible to trade the item as the price assigned to that asset at the opening of the market, there is no guarantee this will always be the case.
Use of an at-the-opening-order can be very helpful for investors. The process typically involves assessing the status of the asset at the time the market closed on the previous trading day, allowing for any overnight events that might impact the level of trading the following day. After allowing for that information and projecting the most likely opening price for that asset, the investor can then instruct the broker or agent to buy or sell that asset for a certain amount, or possibly provide a range of pricing that the investor finds acceptable. Assuming that the investor’s predictions of the opening price for the asset are correct, there is a good chance the broker can quickly execute the at-the-opening-order early on, allowing the investor to either receive the amount of funds desired from the sale or to acquire a new asset at a price that improves the chances of earning a return in short order.
The concept of an at-the-opening-order is similar to the strategy of an at-the-close-order. While both methods require that the investor accurately predict market movements in order to get the most from a purchase or sale of an asset, the at-the-opening-order focuses on locking in the deal before market fluctuations begin to occur on the new trading day. By contrast, the at-the-close-order calls for evaluating the day’s trading and executing a transaction just as the trading day is ending and hopefully securing or selling an asset to best advantage before there is a chance for overnight events to impact the opening price for the following day. Both approaches have the potential to help investors avoid losses or to generate additional returns, assuming that the movement of the asset in question is accurately projected.