CompanyGraph
Captures the starting price of the period, exposing how the market re-priced the stock after the previous session's close.
Open is the first traded price of the period. Comparing the open to the close shows whether the period ended higher or lower than where it started.
The open price is the first traded price of a security when the market opens for the trading session. For stocks, this typically occurs at 9:30 AM Eastern Time when major US exchanges begin trading. The open price often differs from the previous day's close due to news, earnings releases, or events that occurred while the market was closed.
Why the open price matters:
- Gap analysis: Difference between previous close and open reveals overnight sentiment
- Pre-market activity: Reflects pre-market trading and news absorption
- Trading range: Establishes one boundary of the day's price range
- Technical patterns: Used in candlestick patterns and gap trading strategies
Gap types based on open vs. previous close:
- Gap up: Open above previous close; bullish overnight sentiment
- Gap down: Open below previous close; bearish overnight sentiment
- No gap: Open near previous close; continuity from prior session
Factors affecting the open:
- Overnight news: Earnings, management changes, analyst ratings
- Global markets: European and Asian market performance
- Economic data: Reports released before market open
- Pre-market trading: Orders accumulated before regular session
- Index futures: Futures prices indicate expected market direction
Technical analysis applications:
- Opening range breakout: Trading based on breaking above/below early range
- Gap fill strategies: Expectation that gaps may close during the day
- Candlestick analysis: Open relative to close defines candle body
Limitations of the open price:
- Volatility: Opening minutes often have wider spreads and higher volatility
- Institutional activity: Large orders can move the open significantly
- Auction process: Opening prices determined through order matching, not continuous trading
The open provides context for the trading day but represents just one moment in time. Use it alongside close, high, and low prices for complete daily price analysis.