Opening and Closing Orders: MOO, MOC, LOO, LOC

Stock exchanges set their official opening and closing prices through auctions, where buy and sell orders are collected and matched at a single price. Special order types let you take part directly: market on open (MOO), limit on open (LOO), market on close (MOC) and limit on close (LOC). They are widely used by funds that need the official closing price and by traders who want to trade the open or close precisely.

The four auction order types#

Why the closing auction matters so much#

The official closing price is used to value funds, calculate index levels and settle many derivatives. Index funds and ETFs that must match their benchmark often trade at the close to minimise tracking error. As a result, a large share of daily volume in US stocks now trades in the closing auction, especially on days when indexes rebalance. See Index Rebalancing and Opening and Closing Auctions.

How the auctions work#

Before each auction, exchanges collect orders and publish imbalance information: how many shares are waiting to buy versus sell at the indicative price. Traders watch this data and can add offsetting orders, which helps the auction find a fair price.

Exchanges set cut-off times for entering and cancelling auction orders. On the NYSE and Nasdaq, closing auction orders generally must be entered before about 3:50 p.m. Eastern, with tighter limits on cancelling them after that, although orders that offset the published imbalance may be accepted later. Exact rules differ by exchange and change over time, so check the venue's current rules or your broker's guidance.

When to use each type#

• MOO: you want in or out at the official open regardless of price, for example after overnight news when you want to act without guessing pre-market prices. Risky after big overnight moves, because the open can be far from the previous close.
• LOO: you want the opening price but only if it is acceptable to you.
• MOC: you need the official close, such as matching a benchmark, closing a day trade at the final price or trading around rebalances.
• LOC: you want the close, but with protection against an extreme closing print.

Risks and pitfalls#

• Price uncertainty. MOO and MOC orders accept whatever price the auction sets, which can be surprising on volatile days.
• Cut-off times. Miss the deadline and your order may be rejected or treated as a regular order, depending on the broker.
• Limited cancellation. You may not be able to cancel an MOC order close to the auction.
• Gaps at the open. An MOO order after a big news event can fill far from where the stock traded the day before.
• Broker support. Not all retail brokers offer auction order types.

Auctions in other markets#

Many exchanges around the world, including major European and Asian markets, use opening and closing auctions. Futures markets often have a pre-open period where orders are collected before continuous trading starts. Crypto markets, which never close, do not have daily auctions.

Frequently asked questions#

What is a market on close order?#

An order to buy or sell at the official closing price, executed in the closing auction, regardless of what that price turns out to be.

Why do funds trade at the close?#

Because their performance and valuations are measured using closing prices. Trading at the close keeps them aligned with their benchmarks.

Can I cancel an MOC order?#

Usually only before the exchange's cut-off time; after that, cancellations are restricted. Check your broker's and exchange's rules.

Sources#

• New York Stock Exchange, Hours and calendars