Opening Imbalance Only Order (OIO)

WHAT IS AN Opening Imbalance Only Order (OIO)

Opening Imbalance Only Orders (OIO) are a type of limit order that gives liquidity during the opening cross on the Nasdaq. A limit order is an order set with a brokerage to execute a buy or sell transaction at a set number of shares and a predetermined limit price.

BREAKING DOWN Opening Imbalance Only Order (OIO)

Opening Imbalance Only (OIO) orders are only executable on the opening cross and are not shown or spread. OIO buy orders only execute at or below the 9:30 a.m. bid price, while OIO sell orders only execute at or over the 9:30 a.m. offer price. OIO orders must fundamentally be limit orders, and market OIO orders are not permitted. Since OIO orders are only executable during the opening cross, they are not at risk of being executed prior to market open, dissimilar to continuous market orders.

OIO buy or sell orders priced more forcefully than the 9:30 a.m. Nasdaq highest bid or most minimal offer prior to market open will be re-priced to the Nasdaq bid or offer before the opening cross is executed.

Thus, for instance, on the off chance that an OIO buy order price is $9.95 and the Nasdaq bid is at $9.93, the OIO order will be re-priced to $9.93. This adds liquidity to the market and guarantees that Market-On-Open (MOO) and Limit-On-Open (LOO) orders are appropriately executed.

OIO orders are accepted on the Nasdaq from 7 a.m. onward. In any case, market participants can't refresh these orders after 9:28 a.m., albeit new OIO orders can in any case be placed after that time.

NASDAQ

Opening Imbalance Only Orders (OIOs) are executed inside the Nasdaq. Nasdaq is a global electronic marketplace for buying and selling securities, and furthermore fills in as the benchmark index for U.S. technology stocks. The National Association of Securities Dealers (NASD) made Nasdaq to empower investors to trade securities on a mechanized and transparent system. In 2006, Nasdaq formally isolated from the NASD and started to operate as a national securities exchange.

The term Nasdaq is additionally used to allude to the Nasdaq Composite, which is an index of in excess of 2,500 stocks listed on the Nasdaq exchange that incorporate a portion of the world's biggest technology and biotech goliaths like Apple, Google, Microsoft, Oracle, Amazon, Intel and Amgen.

Nasdaq has been a leader in trading technology from its inception. The Nasdaq automated trading system was initially conceived as an alternative to the inefficient specialist system, which had been the common model for trading for almost 100 years. Today, due to quick mechanical progressions, Nasdaq's electronic trading model is the standard for markets worldwide.