The opening range is the interval of prices defined by the lowest and the highest price at the opening of the market. Many exchanges begin trading each day with an opening call for each contract. The opening call allows traders some time to orderly post their initial bids and offers before continuous trading may begin.
After this period of orders posting, also known as preopen trading, and based on the traders orders, some trading actually takes place and allows the establishment of an opening range for prices as well as the actual prices and quantities traded. If only one price was recorded during the opening, the space for the opening high is typically left blank.
When trading is made through an electronic platform, the trading host sends a market mode message to all the participants who have subscribed to a market indicating that preopen has started. During preopen trading, market participants can submit, revise, pull orders, and create strategies, but the type of orders are many times restricted.
Many exchanges allow only for a special order type called market open order. If trading in actually made on the floor of the exchange, a separate opening call is held in each pit for each delivery date in succession before continuous trading begins.
Besides the daily preopen trading, some contracts can also go into preopen during market hours. This occurrence is rare but may happen prior to the release of price sensitive information concerning the underlying to a futures contract. It allows every market participants a period of time to assimilate the information and enter or alter orders onto the market.