When the Paris stock market opens at 9am, the battlelines are already drawn. In a recent Management Science article, TSE researcher Sophie Moinas investigates what happens as traders jockey for advantage before the opening bell. Her study uses rich micro-level data and a system outage to reveal how the different strategies of Euronext participants impact market efficiency.
What can the preopening session reveal about prices?
The preopen is a fascinating microcosm of market forces. On most major exchanges, traders can post, modify, or cancel orders during this period at no cost. No trades occur, yet a lot of information is revealed, as the system displays an indicative opening price that updates in real time as orders arrive.
This transparency helps reduce price uncertainty accumulated overnight -for instance, from corporate announcements or global news. By the time of the opening call, the market has already processed much of that information as traders react to each other’s moves. Studying the preopen can therefore help us understand price discovery, the process by which markets find “fair” prices.
Why is time priority so important to your study?
Our study focuses on how traders behave in the Euronext Paris preopen. This window runs from 7.15am to 9am, when all orders are frozen momentarily, and a call auction determines the single opening price that maximizes traded volume. When there is excess demand or supply at that price, a time priority rule means that earlier orders get executed first.
This rule creates a strategic trade-off. Arriving early secures priority but risks revealing your intentions to competitors. Arriving late conceals your information but could mean losing your place in the queue. Our paper’s “Click first or last?” title captures that dilemma. We wanted to understand who submits orders early or late, why they do so, and how their behavior determines where stocks open.
How do you analyze traders’ behavior?
We use a rich dataset with access to over 18 months of order messages, modifications, and cancellations for 97 stocks in France’s largest publicly traded companies. The data allows us to classify market participants by trading speed and account type, establishing two key categories:
• Proprietary traders – Skillful, fast, typically ending the day with low inventory.
• Slow clients – Less sophisticated, more impatient, and trading on behalf of clients.
We then examine when each group submitted orders and use econometric tests to explore how those decisions impact later price movements.
What patterns did you observe?
Order activity follows a very clear J-shaped pattern: a surge of orders right after 7.15am, then the highest peak in the last minutes before the open.
Slow clients dominate the early phase, especially for stocks with increased tick size (i.e., for which gaining time priority matters most) and on days with expected liquidity shocks. They place many aggressive orders, meaning they are willing to trade even at less favorable prices. This allows them to signal their need to transact and to gain time priority. Their behavior fits what we call the sunshine trading hypothesis: Traders who face penalties for non-execution must get in early to maximize the probability of their orders being filled.
Sophisticated proprietary traders enter late—often just before 9am—especially on days of earnings announcements. Their strategy seems to be driven by concerns about information leakage: If they act too early, others might infer their private information and trade against them.
How do these strategies affect the market’s ability to find the ‘right’ opening price?
Interestingly, both early and late traders play a role. We find that even the very first indicative prices—calculated before 7.30am—already contain meaningful information. Early order imbalances from slow clients significantly contribute to price discovery, showing that their “sunshine” orders are not pure noise. However, late orders from sophisticated traders are even more strongly associated with price informativeness, consistent with the idea that privately informed groups closely monitor the cost of information leakage.
Why investigate the impact of a system breakdown?
On June 6, 2013, Euronext suffered a technical glitch that delayed its preopening. For over an hour, traders couldn’t submit orders, while the competing trading platform, Chi-X, remained open. This shutdown provided us with a rare opportunity to see what happens without a functioning preopen.
We found that sophisticated traders temporarily moved to Chi-X, but slow clients stayed on Euronext. More importantly, price efficiency on Chi-X was significantly damaged that morning. This natural experiment reveals that—even without an opening call—the existence of Euronext’s preopen helps prices to form across the wider trading ecosystem.
Did you find any evidence of manipulation?
We cannot rule out the presence of spoof orders and other manipulation, but we show that other economic mechanisms are in play that can explain traders’ participation in the preopen. Besides, we did not find any convincing signs that informed traders conceal their orders among those of less sophisticated participants. Instead, our data suggests that sophisticated traders may adopt contrarian tactics that absorb early imbalances from slower traders and increase liquidity.
KEY TAKEAWAYS
• Timely decisions – During Euronext’s preopen, participants face a dilemma between clicking early to secure trades and clicking late to hide their strategy.
• Sunshine strategy – Traders acting on behalf of clients enter early to ensure execution and signal trading needs.
• Smart money – Sophisticated proprietary traders hold off until the last moment, minimizing how much competitors can infer from their orders.
• Early birds matter – Surprisingly, even prices in the very first minutes of the preopen contribute to price discovery.
• Lighthouse effect – When the Euronext preopen went dark, price efficiency fell on rival Chi-X, underlining the session’s value for the wider financial system.
FURTHER READING TSE Sustainable Finance Center promotes innovative research on emerging issues in economics and finance. Click First or Last? Strategic Order Submission During the Euronext Preopening Session (coauthored by Laurence Daures and Selma Boussetta) and other publications by Sophie Moinas are available on the TSE website.
Article published in TSE Reflect, November 2025
