after hours and pre market

[raf_bcn]

Hi

In the Spy.
Why there is a gap between the close of the after hours and the opening of the pre market? What produces it?
Maybe there is someone who is authorized to trade outside the regular and the extended hours, but who are they.

And a more specific question about the Ex dividend date. The trading literature says that on the ex dividend date the
stock will open discounting the dividend. I ask you if that is in the pre market opening or in the main opening.
It isn't clear. There is some regulation about this? Looking the past two Spy ex dividend dates it is not clear to me what it is done.

I uploaded an image of the last ex dividend date.

 

[nonlinear5]

Why there is a gap between the close of the after hours and the opening of the pre market? What produces it?

Your chart doesn't show it, but there are good 8 hours between the end of the after-hours trading, and the start of the before-hours trading the next day. A lot of things can happen in 8 hours, including economic reports, political events, and the moves in the futures markets. On your chart, it looks like only 30 minutes separates the after-market and the next day's before-market, which is a chart illusion, of course.

 

[Gotcha]

What produces it?

The futures are trading during this entire time. In fact, there are only 2 period when they aren't trading. That is between 16:15 ET and 16:30, and then 17:00 and 18:00 ET, Monday to Friday. Even here there can be gaps based on what happens during this time like company earnings and stuff.

But with the SPY, if you looked at the ES, you would see it moves up and down overnight, and when it does, the SPY will gap up or down when it finally opens for pre-market.

 

[raf_bcn]

Thank you @nonlinear5 and @Gotcha
It makes perfect sense

Any idea about the second question.

 

[Gotcha]

The trading literature says that on the ex dividend date the stock will open discounting the dividend.

Don't forget that SPY is an index of 500 companies, so I'm not sure how much this matters when earnings and dividends are all over the place on many different days. Granted, its not anything that I know anything about, but just thinking about it, I can't see how a dividend for just one stock would cause the SPY to drop to discount this dividend. Even the big players will get diluted if talking about just a little drop from a dividend announcement when you consider the basket of 500 stocks.

 

[sprstpd]

Don't forget that SPY is an index of 500 companies, so I'm not sure how much this matters when earnings and dividends are all over the place on many different days. Granted, its not anything that I know anything about, but just thinking about it, I can't see how a dividend for just one stock would cause the SPY to drop to discount this dividend. Even the big players will get diluted if talking about just a little drop from a dividend announcement when you consider the basket of 500 stocks.

SPY distributes a dividend on very specific days. You don't have to worry about each company's dividend.

http://www.nasdaq.com/symbol/spy/dividend-history

 

[raf_bcn]

Hi
Yes, the Spy accumulates dividends and only distributes four times per year.
So on the ex dividend date yes there is an effect on the Spy price.
But what I am seeing is that it is usual that the price doesn't discount the total amount of the dividends.

It seems that the Spy doesn't have market forces moving their price, because it is a ETF that tracks the SPX.
And because of this i was asking if there is some internal regulation that makes the price of the Spy decrease on the ex dividend date, and what makes it decrease more or less than the dividend amount.

thanks.