Popular Science: How does the opening price come from?

Beijing time September 19 Evening News, Alibaba Group officially landed on the New York Stock Exchange tonight, 8 Ali user representatives sounded the opening bell of the NYSE. However, ringing the opening bell does not mean that Alibaba Group's shares will immediately enter the trading state. The first deal still requires a process. Alibaba, in particular, has a large volume and a strong interest in the buyer's shares, the first deal will be a longer time. What is the reason? First, because the issue price is not equal to the transaction price, the stock before the first transaction, also need a "price discovery" process. Second, the NYSE's trading mechanism is determined. The NYSE adopts a designated market maker system to offer bilateral quotations for each stock. The market trader will start the formal transaction after discovering the reasonable opening transaction price according to the demand of the buyers and sellers. Specifically, the day before the listing, the new listed companies will determine the issue price. On the day of the listing, a few minutes before the opening bell rang, the designated city Chamber of Commerce continued to receive inquiries from both buyers and sellers. After the order comes in, the market maker according to the hand to get the inquiry, open an approximate interval, then will see how many buyers interest, how many sellers interest. If the buyer's interest is greater than that of the seller, then the city Chamber of Commerce increases the price range until the buyer and seller demand is roughly balanced before reaching an opening price. Conversely, if the buyer's interest is much smaller than that of the seller, the price range will be lowered until the balance is reached. With the opening price, the stock can be officially traded. NYSE China representative Feng Yuhui, general companies listed in the NYSE, in the 15 minutes after ringing the opening bell, the general can open the opening price of the transaction. But the bigger the company, the more the buyer's demand is, the longer the price discovery process takes. For example, when Twitter goes on the market, it's only one hours away from its price. Alibaba may take longer than tonight, as this is a particularly big IPO. September 18, Alibaba Group confirmed the issue price for each ads (U.S. depository Receipts) 68 U.S. dollars, each ads corresponding to a common stock. Prior to this, Alibaba Group designated investment bank Barclays as a market maker.