
Opening Imbalance Only Order (OIO)
Opening Imbalance Only Orders (OIO) are a type of limit order that provides liquidity during the opening cross on the Nasdaq. OIO buy or sell orders priced more aggressively than the 9:30 a.m. Nasdaq highest bid or lowest offer prior to market open will be re-priced to the Nasdaq bid or offer before the opening cross is executed. OIO buy orders only execute at or below the 9:30 a.m. bid price, while OIO sell orders only execute at or above the 9:30 a.m. offer price. A limit order is an order placed with a brokerage to execute a buy or sell transaction at a set number of shares and a specified limit price. Opening Imbalance Only (OIO) orders are only executable on the opening cross and are not displayed or disseminated. OIO orders must necessarily be limit orders, and market OIO orders are not permitted.
WHAT IS AN Opening Imbalance Only Order (OIO)
Opening Imbalance Only Orders (OIO) are a type of limit order that provides liquidity during the opening cross on the Nasdaq. A limit order is an order placed with a brokerage to execute a buy or sell transaction at a set number of shares and a specified limit price.
BREAKING DOWN Opening Imbalance Only Order (OIO)
Opening Imbalance Only (OIO) orders are only executable on the opening cross and are not displayed or disseminated. OIO buy orders only execute at or below the 9:30 a.m. bid price, while OIO sell orders only execute at or above the 9:30 a.m. offer price. OIO orders must necessarily 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, unlike continuous market orders.
OIO buy or sell orders priced more aggressively than the 9:30 a.m. Nasdaq highest bid or lowest offer prior to market open will be re-priced to the Nasdaq bid or offer before the opening cross is executed.
So, for example, if 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 helps ensure that Market-On-Open (MOO) and Limit-On-Open (LOO) orders are properly executed.
OIO orders are accepted on the Nasdaq from 7 a.m. onward. However, market participants cannot update these orders after 9:28 a.m., although new OIO orders can still be entered after that time.
Opening Imbalance Only Orders (OIOs) are executed within the Nasdaq. Nasdaq is a global electronic marketplace for buying and selling securities, and also serves as the benchmark index for U.S. technology stocks. The National Association of Securities Dealers (NASD) created Nasdaq to enable investors to trade securities on a computerized and transparent system. In 2006, Nasdaq officially separated from the NASD and began to operate as a national securities exchange.
The term Nasdaq is also used to refer to the Nasdaq Composite, which is an index of more than 2,500 stocks listed on the Nasdaq exchange that include some of the world’s largest technology and biotech giants such as Apple, Google, Microsoft, Oracle, Amazon, Intel and Amgen.
Nasdaq has been a leader in trading technology from its inception. The Nasdaq computerized trading system was initially devised as an alternative to the inefficient specialist system, which had been the prevalent model for trading for nearly 100 years. Today, due to rapid technological advancements, Nasdaq’s electronic trading model is the standard for markets worldwide.
Related terms:
Bid
A bid is an offer made by an investor, trader, or dealer to buy a security that stipulates the price and the quantity the buyer is willing to purchase. read more
H
The letter H is a NASDAQ exchange fifth-letter identifier for a company's stock symbol when it sells shares with a second convertible bond. read more
Imbalance Only (IO) Orders
Imbalance only (IO) orders are limit orders that will execute only during the opening cross and closing cross on the Nasdaq. read more
Limit-on-Open (LOO) Order
A limit-on-open order is a type of limit order to buy or sell shares at the market open if the market price meets the limit condition. read more
Limit Order
A limit order is used to buy or sell a security at a pre-determined price and will not execute unless the security's price meets those qualifications. read more
Liquidity
Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price. read more
National Association of Securities Dealers (NASD)
The National Association of Securities Dealers (NASD) was a self-regulatory organization of the securities industry and a predecessor of FINRA. read more
Nasdaq Composite Index
The Nasdaq Composite Index is a broad-based market index that includes over 3,000 of the equities listed on the Nasdaq stock exchange. read more
Net Order Imbalance Indicator (NOII)
The Net Order Imbalance Indicator (NOII) is order imbalance information about the opening and closing crosses on the Nasdaq. read more