Skip to main content

Indicative Price / Theoretical Opening & Closing Price

Overview​

Indicative Price, also known as Theoretical Opening Price (TOP) or Theoretical Closing Price, provides real-time visibility into the expected price of a stock based on pre-market or pre-closing order data. This powerful feature helps traders anticipate market movements and make more informed decisions during critical trading periods, including market open, market close, and trading session transitions.

tip

Indicative Price is a premium feature available only for Pro plan and above subscribers.

Understanding Indicative Price​

What is Indicative Price?​

The Indicative Price represents the theoretical price at which a stock is expected to trade based on the current balance of buy and sell orders during specific market periods. It appears as:

  • Theoretical Opening Price (TOP) - Before market open or during session transitions
  • Theoretical Closing Price - During the pre-closing period before market close

The Indicative Price provides traders with:

  • Price discovery - See where the stock is likely to trade during market open or close
  • Market sentiment - Understand buyer and seller demand before critical trading periods
  • Gap identification - Identify potential gaps between previous close and expected opening (for TOP)
  • Closing auction insight - Anticipate the closing price during pre-closing period
  • Trading preparation - Plan your entry and exit strategies based on expected price levels

What is Theoretical Opening/Closing Volume?​

Alongside the Indicative Price, the Theoretical Opening Volume (TOV) or Theoretical Closing Volume shows the expected volume of shares that will be traded at the indicative price. This helps traders assess:

  • Liquidity - How many shares are expected to trade at the indicative price
  • Market participation - The level of interest in the stock at critical trading periods
  • Order matching - The potential volume of matched orders at the indicative price

When Does Indicative Price Appear?​

The Indicative Price is displayed during specific market periods:

  1. Pre-Market Period - Shows Theoretical Opening Price (TOP) before market opens
  2. Between Trading Sessions - Shows TOP for the next session during lunch breaks
  3. Pre-Closing Period - Shows Theoretical Closing Price during the closing auction period

The system automatically determines which type of indicative price to display based on the current market phase.

Subscription Tiers​

Indicative Price access varies by subscription level:

  • Basic Plan: Not available
  • Pro Plan: Access to Indicative Price and Volume data
  • Elite Plan: Access to Indicative Price and Volume data with additional priority features

Indicative Price Display​

Column Headers​

The Indicative Price feature displays the following columns in the monitor table:

  1. TOP (Theoretical Opening/Closing Price) - The expected price

    • Shows the price at which the stock is likely to trade based on current order data
    • During pre-market: Shows Theoretical Opening Price
    • During pre-closing: Shows Theoretical Closing Price
    • Color-coded based on comparison to the reference price:
      • Green: Indicative price is higher than reference price
      • Red: Indicative price is lower than reference price
      • White: Indicative price equals reference price
    • Updated in real-time as new orders come in

  2. TOV (Theoretical Opening/Closing Volume) - The expected volume

    • Shows the total volume expected to trade at the indicative price
    • Displays opening volume (indicative_open_volume) or closing volume (indicative_close_volume)
    • Displayed using notation formatting (K for thousands, M for millions)
    • Example: 125.5K indicates 125,500 shares expected to trade

  3. TOP CHG (Theoretical Price Change) - The change from reference price

    • Before market opens: Indicative Price - Previous Close
    • After market opens and before 2nd session: Indicative Price - 1st session close
    • After market opens and before pre-closing: Indicative Price - 2nd session close
    • During pre-closing: Shows change from current trading price to expected closing price
    • Color-coded:
      • Green: Positive change (indicative price higher than reference)
      • Red: Negative change (indicative price lower than reference)
      • White: No change

  4. TOP CHG (in Ticks) - The change expressed in tick increments

    • Shows how many ticks the indicative price has moved from the reference price
    • Useful for understanding the magnitude of the expected move
    • Takes into account the stock's tick size for accurate representation

Visual Indicators​

Price Color Coding​

The Indicative Price is color-coded to help you quickly identify the direction:

  • Green indicates the indicative price is above the reference price (potential gap up or strong close)
  • Red indicates the indicative price is below the reference price (potential gap down or weak close)
  • White indicates the indicative price equals the reference price (no significant change expected)

Real-Time Updates​

During pre-market, pre-closing, and session transition periods:

  • Indicative Price and Volume update in real-time as new orders are added or cancelled
  • Changes reflect the evolving balance between buy and sell orders
  • The display automatically recalculates based on the latest order book data

How Indicative Price is Calculated​

Calculation Method​

The Indicative Price (whether Opening or Closing) is calculated using the following principles:

  1. Order Matching: The system matches buy and sell orders to find the price that maximizes the volume of shares traded
  2. Price Priority: At the indicative price, all buy orders at or above that price and all sell orders at or below that price will be matched
  3. Volume Maximization: The indicative price is the price that results in the largest number of shares being traded
  4. Market Balance: The calculation considers the balance between buy and sell orders

Reference Price Changes​

The Indicative Price change calculation uses different reference prices depending on the trading session:

  • Pre-market (before market open): Reference is the previous day's closing price
  • Between sessions: Reference is the previous session's closing price
  • Pre-closing period: Reference is the current session's last traded price

This ensures the change always reflects the most relevant comparison for the current trading phase, whether it's for opening or closing.

Features and Use Cases​

Identifying Gap Opportunities (Pre-Market)​

Use Indicative Price to identify potential gap trading opportunities before market open:

  1. Gap Up Scanner: Filter stocks where Indicative Price > Previous Close
    • Indicates positive pre-market sentiment
    • May signal bullish momentum
    • Consider buying on opening dips if fundamentals support the move

Closing Auction Strategy (Pre-Closing)​

Use Indicative Price during the pre-closing period to optimize closing trades:

  1. Closing Price Anticipation

    • See where the stock is likely to close before the auction ends
    • Adjust limit orders to ensure execution at favorable closing prices
    • Plan whether to participate in the closing auction

  2. Closing Arbitrage

    • Compare current trading price with expected closing price
    • Identify opportunities when the difference is significant
    • Execute strategies that benefit from closing price movements

Pre-Market and Pre-Closing Planning​

Use Indicative Price to plan your trading strategy:

  1. Entry Planning

    • Set limit orders near the indicative price if you want to participate at the open or close
    • Plan for potential volatility if indicative price differs significantly from current/reference price
    • Adjust your entry strategy based on indicative volume (higher volume = more reliable price)

  2. Exit Planning

    • If holding overnight positions, use morning indicative price to decide whether to hold or sell at open
    • If holding intraday positions, use pre-closing indicative price to optimize exit timing
    • Large differences may trigger stop losses or take profit targets immediately
    • Monitor indicative price changes leading up to the event for trend confirmation

Market Sentiment Analysis​

Analyze Indicative Price data for broader market insights:

  1. Sector Sentiment

    • Compare indicative price changes across stocks in the same sector
    • Identify sector-wide movements or divergences
    • Spot potential sector rotation opportunities

  2. Market Direction

    • Monitor indicative price for index components to gauge overall market direction
    • Large positive indicative prices across many stocks may indicate bullish market open/close
    • Widespread negative indicative prices may signal market weakness

How to Read Indicative Price Data​

Basic Reading​

  1. Check the Indicative Price Value

    • Compare indicative price to the reference price (previous close or current price)
    • Identify the expected gap size (if pre-market) or closing movement (if pre-closing)
    • Note the color coding for quick assessment

  2. Assess the Volume

    • Check indicative volume to gauge liquidity at the indicative price
    • Higher volume indicates stronger conviction in the price
    • Low volume may suggest the indicative price is less reliable

  3. Monitor Changes

    • Watch how indicative price evolves during the pre-market or pre-closing period
    • Consistent direction may indicate strong sentiment
    • Erratic changes may suggest uncertainty

Advanced Reading​

  1. Indicative Price Stability

    • A stable indicative price suggests consensus on the expected price
    • Rapidly changing indicative price indicates evolving sentiment
    • Last-minute changes may signal important news or order flow

  2. Volume-Price Relationship

    • High volume with small price change: Strong accumulation/distribution at current levels
    • High volume with large price change: Significant event driving strong directional move
    • Low volume with large price change: Potentially unreliable, may reverse after execution

  3. Session Transition Analysis

    • Monitor indicative price during lunch breaks or session transitions
    • Changes can indicate intraday sentiment shifts
    • Use for planning entries/exits in the next session

  4. Pre-Closing Analysis

    • Compare current trading price with the indicative closing price
    • Large differences may present arbitrage or timing opportunities
    • Monitor how the indicative closing price stabilizes as auction time approaches

Important Notes and Limitations​

Data Reliability​

  • Indicative Price is based on current orders which can be cancelled before execution
  • The actual opening or closing price may differ from the indicative price due to last-minute order changes
  • Market orders submitted at the open or during closing auction are not reflected in the pre-execution indicative price
  • Hidden or iceberg orders are not visible in the calculation

Market Events Impact​

Be aware of events that can affect Indicative Price accuracy:

  1. Breaking News: Major news released close to the open or close can invalidate the indicative price
  2. Market Orders: Large market orders can push actual price away from indicative price
  3. Order Cancellations: Traders may cancel orders just before execution, changing the balance
  4. Institutional Orders: Large orders may be hidden or placed at the last moment

Trading Session Variations​

Different trading periods may have different Indicative Price behaviors:

  • Market Open: Most significant with highest volume and reliability for opening price
  • Lunch Session: Lower volume, potentially less reliable for session transitions
  • Pre-Closing Auction: Critical for determining closing price, typically high reliability
  • Special Sessions: Half-day sessions or holidays may show different patterns

Data Accuracy​

  • Indicative Price reflects the current state of the order book in real-time
  • Orders can be added, modified, or cancelled at any moment
  • By the time you react, the order book may have changed
  • Use as one tool among many in your analysis toolkit

Best Practices​

  1. Combine with Other Indicators

    • Use Indicative Price alongside technical indicators and chart patterns
    • Consider fundamental news and events that may affect the open or close
    • Don't rely solely on indicative price for trading decisions

  2. Monitor Leading Up to Events

    • Start tracking indicative price 15-30 minutes before market open or closing auction
    • Watch for trends and stability in the indicative price
    • Note significant changes in volume as they may signal important developments

  3. Set Realistic Expectations

    • Understand that Indicative Price is an estimate, not a guarantee
    • Actual opening or closing price can vary from indicative price
    • Use indicative price as a guide for planning, not as a precise prediction

  4. Consider Market Conditions

    • Indicative Price is most reliable in normal market conditions
    • During high volatility, indicative price may be less predictable
    • Major news events can override pre-market or pre-closing order patterns

  5. Use Appropriate Order Types

    • Limit orders near indicative price can help you participate at desired prices
    • Market orders may execute far from indicative price in volatile conditions
    • Consider stop-limit orders to protect against adverse price movements

  6. Practice and Learn

    • Track indicative price accuracy for your preferred stocks over time
    • Note patterns in how indicative price relates to actual opening/closing prices
    • Build experience in interpreting indicative price in different market conditions

  7. Differentiate Between Opening and Closing

    • Understand that pre-market and pre-closing indicative prices serve different purposes
    • Pre-market helps with gap analysis and opening strategies
    • Pre-closing helps with closing auction participation and end-of-day positioning

Frequently Asked Questions​

Q: What's the difference between Indicative Price and the actual opening/closing price?​

A: Indicative Price is the expected price based on current orders, while the actual opening or closing price is determined by all orders (including market orders and last-minute submissions) when the market opens or closes. The actual price can differ from the indicative price due to last-minute order changes, market orders, or breaking news.

Q: Why does Indicative Price keep changing?​

A: Indicative Price updates in real-time as traders add, modify, or cancel their orders. Each change in the order book can affect the balance between buy and sell orders, resulting in a new indicative price calculation. This is normal and reflects evolving market sentiment.

Q: Can I trade at the Indicative Price?​

A: The Indicative Price represents the expected price, but there's no guarantee you'll trade at that exact price. To maximize your chances, you can place a limit order at or near the indicative price. However, the actual execution depends on the final order matching when trading occurs.

Q: What's the difference between Theoretical Opening Price and Theoretical Closing Price?​

A: Theoretical Opening Price (TOP) appears during pre-market periods and shows the expected opening price based on pre-market orders. Theoretical Closing Price appears during the pre-closing auction period and shows the expected closing price based on closing auction orders. Both use the same calculation method but apply to different trading events.

Q: What does it mean if the Indicative Price is much higher than the reference price?​

A: A significantly higher indicative price indicates strong buying interest. In pre-market, this suggests the stock may gap up at the open. During pre-closing, it suggests the stock may close strong. However, verify the reason for the movement before trading.

Q: How reliable is the Indicative Volume?​

A: Indicative Volume indicates the expected volume at the indicative price based on current orders. Higher volume generally means more reliable indicative price, as more participants are committed to trading at that price. However, like the price, the actual volume may differ due to last-minute changes.

Q: When should I start monitoring Indicative Price?​

A: For opening prices, start monitoring 15-30 minutes before the market opens. For closing prices, monitor during the entire pre-closing auction period (typically the last 5-10 minutes of trading). This gives you enough time to observe trends, assess stability, and plan your trading strategy.

Q: Does Indicative Price work for all stocks?​

A: Indicative Price is calculated for stocks that have pending orders during the relevant period (pre-market or pre-closing). Stocks with no orders will not display indicative price data. Additionally, highly liquid stocks typically have more reliable indicative prices than thinly traded stocks.

Q: How is this different from pre-market trading prices in other markets?​

A: Pre-market trading (common in some markets) shows actual trades happening before the official market open, while Indicative Price is a calculation based on pending orders that will be matched at the opening or closing. Indicative Price represents where the stock is expected to trade, not where it's currently trading in extended hours.

Summary​

Indicative Price is a powerful tool that provides transparency into expected opening and closing prices. By understanding the pre-market and pre-closing order flow, traders can:

  • Anticipate gap opportunities and plan opening strategies
  • Optimize participation in closing auctions
  • Assess market sentiment before critical trading periods
  • Make more informed entry and exit decisions
  • Identify potential support and resistance levels for opens and closes
  • Monitor market dynamics during session transitions

Remember that Indicative Price is just one tool in your trading toolkit. Always combine it with other forms of analysis, maintain proper risk management, and understand that the actual opening or closing price may differ from the theoretical price.

For optimal results, upgrade to the Pro plan or above to access Indicative Price, Indicative Volume, and related features, providing you with valuable pre-market and pre-closing insights to enhance your trading decisions.