I will try to explain somethingI'll try to explain something, as best I can.
People have likely noticed Xebec's habit of opening higher, then backing off. They might be wondering why this happens so consistently. I will try to explain. It all comes down to the mechanics of the opening trade.
Imagine a scenario, much like today's. What happens if there are more market orders to buy than there are too sell at the open? In this case, the pre-opening price will be raised to include enough limit sell orders to meet the market orders to buy. All market buy orders entered prior to the opening must be filled at the same price.
We can use today as an example, Xebec having closed at $10.22 yesterday. Let's assume there were orders to but 45,000 shares at market this morning, but only orders to sell 10,000. There will be limit orders to sell slightly above the market. For example there may be orders to sell 3000 at $10.23, 5000 available at $10.24, 10,000 at $10.25, and so on, up till the price where all market buy orders for 45,000 shares will be filled at the same price. Even those who had limit sell orders in to sell at $10.25 and $10.26 were sold at the opening price of $10.28 today. A limit order is just that, it's an order to sell at your limit price or better. Many people don't realized that a limit order can, and often does, get filled at a price higher than the limit.
Taking this example a step further, after the opening trade at $10.28, there are very likely limit sell orders that remain unfilled just above the market. Orders to sell at $10.29, $10.30, and so on, at consecutively higher prices. But think! What about the bids?....All of the buy orders up to and including $10.28 are gone, because they were filled at the open.
There is a gap on the buy side immediatelt after the opening trade. People dont put in limit buy orders a penny or two below the market seconds after the opening price is determined. This means that after the open, there are limit sell orders at one cent intervals right above the opening price, but not corresponding limit buy orders at one cent intervals below it. They've already been filled.
Quite often, some sellers will change their existing limit orders right after the open in order to get filled, or new sellers will come in to a market of freshly thinned bids, so the stock will fill the opening gap. Then, after a few minutes, the market equalizes, the stock stabilizes, and the day's trading resumes normally, after accounting for the temporary disequilibrium in the market at the open.
This is why that happens.