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In our last posting we explained the morning and afternoon trading sessions. We also mentioned the new session called Pre-Opening and Pre-Closing. Bursa new trading system will use these pre-opening and pre-closing session to calculate the Theoretical Opening Price (TOP) and Theoretical Closing Price (TCP). This is Part 3 of our introduction to Bursa New Trading System.

Part 1 was Bursa New System difference with the old system
Part 2 was about the Bursa New System Trading Session

What is the Theoretical Opening Price ?

According to Bursa defination; “The Theoretical Opening Price or TOP is the price at which the share would trade if it opens at the moment the price is calculated. TOP is calculated on a real-time basis on Pre-Opening Phase. With TOP, investores can get a better understanding of market demand and supply conditions to better plan their investment strategies.”

Basically a Dealer’s representative (Remisier or Dealer) can view via their new Bursa Trade Securities (BTS) system the TOP after the pre-opening phase. Most of us investors would not have privy to it. We have to call our remisier or dealer to check the TOP. So far we don’t have any idea how the TOP is decided but it is based on all the buy and sell order keyed-in during the pre-opening phase.

What is the Theoretical Closing Price ?

The Theoretical Closing Price is the price at which a share would trade if it stops trading at the moment the price is calculated. TCP is calculated on a real-time basis in Pre-Closing/Closing phase. As the TCP is locked in at the Trading at Last and Closing, it allows the investor to gauge the price to be traded at the Opening as well as to plan ahead with greater clarity.

During the Trading at Last phase, you can ony input buy or sell order at the price of the TOP. Therefore the price will not suddendly move up or down just before the close.

We will try to find out how the TOP and TCP are calculated and post it here in the future.

In the next posting we will show example on how trade are matched in Bursa Trade Securities System.

Related Posts:

• Bursa New Trading System – Part 2
• Changes to Bursa Pre-closing and Trading-at-last
• Broker Trade Securities Update
• Bursa Trade Securities (BTS) Live!
• Bursa Trade Securities Website

In our last post about Bursa new trading system called BTS or Bursa Trade Securities, we informed that there are much more transparent methods of calculating the opening and closing price. Today we will look at what it means.

There are two trading session per day.

(a) Morning trading session

8.30am to 9.00am – pre opening
9.00am – opening
9.00am to 12.15pm – continuous trading
12.15am to 12.20pm – pre closing
12.20pm – closing
12.20pm to 12.30pm – trading at last

Bursa Morning Trading Session

(b) Afternoon trading session

2.00pm to 2.30pm – pre opening
2.30pm – opening
2.30pm to 4.45pm – continuous trading
4.45pm to 4.50pm – pre closing
4.50pm – closing
4.50pm to 5.00pm – trading at last

Bursa Afternoon Trading Session

As you can see from the above there are TWO pre-opening and TWO pre-closing period.  During these period, the BTS system will find the best opening or closing price based on a set of algorithm. During these two periods there will not be any matching done. Dealer’s representative can only input their buy or sell order during these two periods.

Once the opening price has been decided, that will be the Opening price. Same goes with the closing price. However there is a difference for the closing price. You will notice that there is period called Trading-At-Last for both the morning and afternoon session. During Trading-At-Last period there will not be any movement of the price. The price is fixed at the closing price and customers can be sure that he/she will get the same price as the closing price during this period. This period is also for institutional clients to close their position at a fixed price rather the current trading system whereby someone can manipulate the price by keying a market buy or sell to change the closing price up or down drastically.

In the next Pro Trade Shares posting, we will explain the algorithm involved in the deciding the matching price in BTS.

Related Posts:

• Theoretical Opening Price and Theoretical Closing Price
• Broker Trade Securities Update
• Changes to Bursa Pre-closing and Trading-at-last
• Bursa Trade Securities (BTS) Live!
• Bursa Trade Securities Website