opening transaction

Opening transaction

Applies to derivative products. (1)Buy or sell transaction that creates a position out of a flat one (writing an option short or buying an option long). Antithesis of closing transaction. (2) First transaction of the day in a stock.

Opening Transaction

1. In options contracts, the transaction which starts either a long position or a short position. For example, if an investor writes a put option and then later exercises the option, the initial writing of the option contract is referred to as the opening transaction and its exercise is the closing transaction, because it closes a position. The opening transaction is thus an investor's first trade in a series of at least two related trades.

2. The first trade on a given security on a given trading day. This especially refers to the price at which the security is traded. Investors like to know the price of the opening transaction because it gives them a comparison to the prices of the previous trading day, which helps them attempt to predict short-term trends. It is also important to investors who placed orders for a security after the close of the previous trading day: the price of the opening transaction is the price the investors will pay or be paid.

opening transaction

1. The initial transaction during a trading day for a particular security. The price at which an opening transaction takes place is important to investors who have placed market orders before the market opens or who have placed at-the-opening orders, because the price at which the opening transaction takes place is the price that these investors will pay for or the price they will receive for the security. Compare closing transaction.
2. An option order that establishes a new investment position or that increases the size of an existing investment position. Compare closing transaction.
References in periodicals archive ?
Purchases must not constitute the opening transaction or occur during the last half hour of trading, or the last 10 minutes of trading for issuers who have an average daily trading volume (ADTV) of $1 million or more and a public float value of $150 million or more.
Adding this option with the account opening transaction can immediately increase commitment and simplify the entire process.
The first post-announcement transaction (the opening transaction after the announcement) accounts for 69% of the total CAR earned by transaction +25 (the mean abnormal return for this transaction is 0.
Period 1 for nontrading-hours announcements is the first 15-minute trading period after the opening transaction.
During the half hour after the opening transaction, significant but relatively small abnormal returns are earned: 0.
38) This is not surprising since the opening transaction on the NYSE is a batched transaction (i.
Examining opening prices, we find that, on average, about 90% of the initial day's mean return is earned on the opening transaction and that the subsequent average intraday return is smaller than conventional estimates of transactions costs.
Nonparametric tests provide striking evidence that the first day's return on IPOs is earned at the opening transaction.
Summing up, we find that the underpricing of operating-company IPOs is a phenomenon that is largely restricted to the opening transaction.
The firm also performed opening transactions for customer and proprietary accounts that exceeded the applicable position limit in certain OTC options.
After the completion of the opening transactions at 0945 CET, the ATX stood at 2,738.