Selfwealth
When a big company lists in the US, you might expect its shares to start trading the moment the market opens. They usually don't. Here's what actually happens on IPO day, and how it looks from Australia, using Anthropic's planned Nasdaq listing as an example.
IPO price vs opening price
The IPO price is set the night before listing. It's the price at which the company sells shares to institutions and brokers that received an allocation. Most retail investors, including Selfwealth customers, don't get access to these shares until they actually begin trading on the market.
The opening price is the price of the first trade on the exchange. It's set by supply and demand on the day, and it can be well above or below the IPO price. This is the first price most investors can actually buy at.
What happens, in order
The symbol goes live. On listing day, brokers set up the new ticker before the market opens. For Anthropic, Selfwealth expects this around 5:00am New York time, or 9:00pm AEDT.
Orders are queued. Investors can place limit orders for whole shares. These sit in a queue and can't fill yet.
The market opens at 9:30am New York time. The new stock still isn't trading.
Price discovery. The exchange and market makers gather buy and sell orders to find an opening price that matches as many orders as possible. This can take a few minutes or a few hours.
The opening cross. The first trade happens, usually between 10:00am and 12:00pm New York time (about 2:00am to 4:00am AEDT). Queued limit orders at or better than the opening price can fill.
Normal trading begins. Market orders are accepted. Fractional and dollar-amount orders follow a few minutes later.
Why only limit orders before the open?
A limit order sets the most you're willing to pay. Before the first trade, no one knows where the price will land, so a market order could fill at a price far from what you expected. Limiting pre-open orders to limit orders protects you from that. Limit prices far outside a reasonable range may be rejected.
It's also why pre-open orders must be for whole shares. Fractional orders depend on an established market price, so they're only available once trading has started.
Trading halts
US exchanges have "limit up-limit down" rules that briefly pause trading when a stock's price moves too far, too fast. A busy new listing can be halted several times on its first day. Open orders aren't cancelled during a halt. They stay in place and can fill when trading resumes, at your limit price or better.
Day two, from Australia
US listing day falls overnight in Australia, but you don't have to stay up. If ANT is available in Selfwealth's overnight session, you'll be able to place limit orders between 12:00pm and 8:00pm AEDT, starting the day after listing.
Quick checklist
Set up your account and US trading before listing day.
Decide your maximum price before the first trade, and use a limit order.
Expect a delay between the US open and the first trade.
Remember the first trading price can differ sharply from the IPO price.
You don't need to buy on day one.
All times assume a 16 November US listing date and will change if the date moves.
Important disclaimer: SelfWealth Pty Ltd ABN 52 154 324 428 (“Selfwealth”) (AFSL 421789). The information contained on this website is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser and/or accountant. Taxation, legal and other matters referred to on this website are of a general nature only and should not be relied upon in place of appropriate professional advice. You should obtain the relevant Product Disclosure Statement for any product mentioned and consider its contents before making any decision.
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