Buyers and sellers submit offers and counteroffers until the prices match to decide the pricing for the opening cross. The opening cross procedure aims to maximize execution by facilitating trading the most shares of a particular security at a single price. Nasdaq allows trade requests for several hours after the market closes and several hours before it opens, even though trades are only performed from 9:30 am to 4:00 pm. Market players can view the prices at which buyers are willing to buy, and sellers are willing to sell by accessing the information about these requests electronically. A 10% threshold is used to determine the beginning price while matching prices.
Nasdaq allows orders to be entered as Limit-on-Open and Market-on-Open since a trade can only occur when the purchase and sale prices match. Orders for MOO can be made, modified, or canceled between 7:30 am to 9:28 am. The price at which LOO orders are entered is known as the “limit” price. Trades are carried out at opening pricing and aim to match as many buyers and sellers as possible at 9:30 am. Only trades requested to occur at the “on open” order price and “imbalance only” orders are intended to increase liquidity and enable trading.