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Pre-Market Opening Period 
27/01/2010 
 

The pre-market opening mechanism serves to establish an orderly market open and greatly enhances market efficiency. During the Pre-Market Opening Period, the calculated opening prices (COP) are established before the market open without matching orders. At present, the pre-market opening is only available for the trading of Hang-Seng Index-related futures contracts and H-shares Index futures contracts.

The following three trading sessions make up the Pre-market Opening Period:

Pre-Opening
  • For auction orders, limit orders and inactive orders only
  • Orders may be modified and cancelled 
  • Unfilled and unexpired orders from the previous day are included  
  • Combination series will not be included in this session  
  • Continuous update of the Calculated Opening Price (COP) once it is determined  
  • Both limit orders and auction orders can affect the COP
          
Pre-Open Allocation
  • For auction orders and inactive orders only
  • No activation of inactive orders, order modification or cancellation  
  • Only new auction orders can affect the COP  
  • Bulletin Board and combination orders are not allowed
        
Open Allocation

  • No input, modification or cancellation of auction orders or limit orders  
  • Input of inactive orders allowed  
  • Orders will be matched in order type, price and time priority at the COP at the end of the session  
  • If there exists a COP, unmatched auction orders will be converted to limit orders at the COP
  • If there is no COP, unmatched auction orders will be converted to limit orders at best bid and ask prices
  • If there is no COP and no best bid and ask prices in the market, unmatched auction orders will be remained as inactive orders in Order Book  
  • Unmatched limit orders will be converted to normal limit orders
  • Users are not able to change or delete orders for 2 minutes during the Open Allocation session
        

Calculation of COP

The COP is calculated every time an order is placed in the market and it will be displayed in the "EP" column of the Price Information Window. The COP is calculated according to the rules defined below:

  1. The COP cannot fall outside the best bid and offer of unfilled orders, though it can be equal to the bid or offer; 
     
  2. If more than one price satisfy rules 1 above, the COP will be the price with the number of matched contracts is maximized;
      
  3. If more than one price satisfy the rules 1 & 2 above, the COP will be the price at which the normal order imbalance is the lowest;
      
  4. If more than one price satisfy the rules 1 - 3 above, the COP will be the price at which the associated crossed qty is the highest; 
       
  5. If more than one price satisfy 1 - 4 above, the COP will be the price closest to the settlement price of previous trading section;
       
  6. If more than one price satisfy 1 - 5 above or if no settlement price is defined, the highest price will be chosen.