Hi David,

(i'd like to thank you for putting together this excellent resource)

My first question is about Gaps in open prices

From an operational point of view, how does that happen?

Is it because, based on events outside of the trading hours, people place orders in the market at a price much higher/lower than yesterday's close and when the market opens, their's is the first order to get processed, resulting in a price gap?

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My second question is about listing a stock on multiple exchanges

Since the stock will have to be evenly priced on all the exchanges (to avoid arbitrage I guess?) - Is there a correlation between the price of the stock on multiple exchanges? Is it simply the forex rate between the currencies used on those exchanges or are there other factors like interest rates etc.?

thanks for your time Dave, much appreciated

Hi pjethwani,

Good to hear from you I hope things are going well.

As far as gaps goes you have it correct there that events outside of market hours cause the market to reprice the stock or other financial instrument. So for example if something happens which causing the market to price a stock that was trading at $10 per share at $11, then that change is priced in immediately and there is no opportunity to trade the stock at say $10.50.

This is true whether we are talking about the market open or something which happens during market hours.

As for stocks which are listed on international exchanges to be honest I do not trade stocks outside of the US Markets at this time so I wouldn't know for sure but I suspect that they would be priced exactly the same when converting into the different currencies without factoring in interest rates or anything like that.

One thing to keep in mind here is that there are different classes of stock ie preferred shares vs. common shares that are priced differently so make sure you are looking at the same class when comparing between markets.

If there are any other questions or comments on this one please feel free to post them below.

Best Regards,
Dave