The Nasdaq Stock Market Inc. announced it has completed its rollout of “opening cross”, a new, fully-transparent auction process for opening the Nasdaq market.
Launched in October, the opening cross is a centralized order facility that provides market participants and investors with a highly transparent and accurate single opening price in Nasdaq-listed securities. Nasdaq reports that its market open is one of the most active points of the trading day with the market processing up to 15,000 messages per second.
The opening cross initially launched with two test securities and then expanded to live stocks. And, as of today, all Nasdaq-listed securities will be in both the opening and closing cross.
Nasdaq disseminates detailed information about any order imbalances during the last several minutes leading into the open. At 09:30 ET, the Nasdaq Market Center then executes the orders at a single price to establish the Nasdaq opening price. Nasdaq disseminates the opening cross price as the Nasdaq official opening price for those issues included in the cross.
“The provision of a transparent single opening price for some 3,300 Nasdaq companies is an achievement that will benefit investors, indexers, issuers and traders,” said Chris Concannon, executive vp of Nasdaq Transaction Services, in a release. “We believe this development will further increase investor confidence through enhanced transparency and reliability.”
Dow Jones Indexes, Russell Investment Group and Standard & Poor’s, have agreed to use the Nasdaq opening cross price for the expiration of options and futures, beginning on December 17. All major indexes already use the Nasdaq closing cross for index valuations.
Nasdaq completes roll out of “opening cross”
Transparent, single opening price for 3,300 stocks
- By: James Langton
- December 13, 2004 December 13, 2004
- 13:40