new to the market so forgive me if this is a very noob thing to ask. yesterday and week or two ago i noticed that on the very first hour almost all the stock (atleast ones i was watching 10 or so) were bought 10-20 points above the closing price of the previous day. Is this a normal behaviour? I as a retail investor certainly won’t be buying stocks like that and i dont think others like me will do it too. Or is it that people usually pay more so as to make the price go higher.

looking at the charts i see similar thing happen a lot. why is that???

edit: Thanks for commenting ya’ll. what i though was seeing a change of 1.5% and more immediately after the market open was weird ans sus and i knew there is a min and max price. i kinda screw up in phrasing my question properly.

More at: r/NepalStock by takturumthes

  1. “Early in the trading day, spreads are wide and depths are thin, while later in the trading day, spreads are narrow and depths are thick. A trade early in the day therefore moves the price more than an equally sized trade later in the day. “

  2. Why would you as a retail investor not invest like that?
    How would you invest otherwise?

    I mean that’s the rule of nepse, you have to invest it according to the LTP and 2% increase/decrease rule and 10% rule.

    I would elaborate on the rules of nepse but it has been explained well in the comments already.

  3. There is a specific buying and selling rule in Nepse.

    First rule: Any stock can either increase or decrease by only 10% in a trading day based on the price of previous day’s last traded price (LTP). For e.g. if a stock’s LTP today is Rs 100, then its price tomorrow can either increase up to Rs 110 or decrease up to Rs 90.

    Second rule: A stock’s price can increase or decrease in price by only 2% at each trade. So for a stock to reach Rs 110 in price, it will go like this 100, 102(2% increase), 104(again 2% increase), 106(same), 108(same) and 110.

    Therefore, for a stock priced at Rs 1000 an increase of Rs 10 or Rs 20 is nothing, and is similar to a stock priced at Rs 200 increasing by Rs 2 or Rs 4.

    Yes, to newcomers this is generally what happens, they see certain stocks trading at 1000+ and think it would not be wise to invest or trade in it and rather stocks priced at 200-300 would be a better choice. But the reality is very different which you will slowly learn.

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