This article covers all basic terms when analysing a share and its trading action for a given period. 

ASX Code

The ASX allocates a three letter code to each security listed on the exchange. The ASX website (www.asx.com.au) is a useful place to find companies stock codes.

Examples:

National Australia Bank – NAB.ASX

Commonwealth Bank – CBA.ASX

Last Price

The last sale price is the price at which the share last traded.  If the market  is closed, the last sale price is the final match price for the previous day.

Bid and Ask

The 'Bid' price is the maximum price a buyer is willing to pay for a stock and the 'Ask' is the lowest price a seller is willing to sell their shares at. The 'bid and ask spread' is the spread between the price buyers are willing to pay and the price sellers are willing to sell for.

Market depth shows a complete list of buyers and sellers, their bid and ask prices and the associated volume.

Open and Close

The open price is the price at which shares matched at for that particular day and close price is the price at which shares matched at 4.10pm. The match phases are discussed in more detail later in this article.

High and Low

High and low indicates the highest price the shares traded at for a given period and the lowest price for a given period. Often displayed for a 1 day or a 52 week period.

Market Phases

Pre Opening Phase

From 7.00am – 10.00am Sydney Time

Brokers and investors are able to enter orders into the market, however no orders are traded in the opening phase.

Opening Phase

A matching price by volume auction takes place in the opening phase where any overlapping orders are “matched” between bidders and offers during the Pre-Opening Phase. When the orders are matched against each other, an average price by volume is calculated and everyone trades at this price.

Opening phase begins at 10.00am Sydney time and lasts for 10 minutes.

Securities open in the following sequence

1.       10:00.00 am A-B

2.       10:02:15 am C-F

3.       10:04:30 am G-M

4.       10:06:45 am N-R

5.       10:09:00 am S-Z

Orders in the market during the Opening Price phase from 10:00 – 10:10 am tend to overlap  and therefore these orders are matched against each other and will trade at the price at which maximum volume is executed. This is a volume weighted average price of all the orders.

Normal Trading

Normal Trading occurs between 10:00 am and 4:00 pm Sydney time. During this period, orders can be entered into the market at a limit price, or can be entered to hit/meet other investors bids and offers.

Pre-Open Prior to Closing Phase

The Pre-Opening Phase at the end of the day takes place between 4:00 pm and 4:10 pm in the same way as the Pre-Opening Phase in the morning. Once again brokers are able to enter, change and cancel orders without trades taking place. 

Closing Single Price Auction

The market close is also known as the Closing Single Price Auction which takes place between 4:09pm and 4:10pm Sydney time. The Closing Single Price Auction occurs in exactly the same way as the market Opening Phase, by the matching of the overlapping buy and sell orders.

Types of Orders

Market Orders or At Best Order

A market or at best order is an order to buy or sell a security immediately at its current trading price. This usually involves a buyer hitting a sellers ask price or a sell hitting a buyers bid price.

Limit Order

A limit order is an instruction to buy or sell at a particular price or better.

For example, buy at a limit of $20.00 indicates the buyer is happy to purchase the stock for any price up to $20.00