how the market opens with a gap?

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LATHA RAMESH (Querist)

07 March 2008 Dear fellow CAclub members,
while I have been reading about stock market movement in a day, i come across the term "the market opened with a positive/negative gap of --- points. What exactly meant by this? The dealers can order only after the market opens, then what determines the above mentioned gap?
Hope I am clear in my question.

R.V.RAO

R.V.RAO (Expert)

08 March 2008 IT IS VERY MUSH POSSIBLE AS MY STOCK BROKER FROM NET WORTH STOCK BROKING
MR. MURTY TELLS ME THAT ONE CAN BOOK ORDERS FOR SALE OR PURCHASE IN THEIR RESPECTIVE TRADING ACCOUNTS AND THAT THE ORDERS ARE ACCEPTED .BUT THE EXECUTION OF THE ORDER TAKES PLACE WHEN THE MARKET OPENS.
IN OTHER WORDS WHAT HE IS SAYING IS ORDERS DO POUR IN FOR SALE AND PURCHASE.
A DEMAND FOR BUY OR SELL IS BUILT UP IN A PARTICULAR SCRIP.USUALLY THE 30 SENSEX SCRIPS ARE MUCH IN DEMAND AND RECORD HIGH VOLUMES .
WHEN THAT TAKES PLACE , AS YOU KNOW THE PRICES GO UP OR DOWN AS PER DEMAND AND SUPPLY WHETHER THE MARKET IS ON OR OFF.
AS THE TRADING OPENS UP, THE ALREADY BUILT UP DEMAND FOR SELL OR BUY DICTATES THE TREND AND ACCORDINGLY THE MARKET OPENS UP OR DOWN WITH A GAP .
IF YOU HAVE A TRADING ACCOUNT WITH ANY STOCK BROKING FIRM, YOU CAN ALSO FIND OUT AND CONFIRM THE SAME.
R.V.RAO

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