20 dollar spreads

[hoodooman]

Each morning I review a long list of nasdaq high volume stocks premarket. Some of these stocks have spreads as wide as 20 bucks. Are these absurdly wide spreads a strategy to catch some neophite in a badly timed market order at the open? If it is does it work?

regards
peter daniels

 

[saschabr]

does not work

 

[sprstpd]

Quote from hoodooman:

Each morning I review a long list of nasdaq high volume stocks premarket. Some of these stocks have spreads as wide as 20 bucks. Are these absurdly wide spreads a strategy to catch some neophite in a badly timed market order at the open? If it is does it work?

regards
peter daniels

The problem is even if you catch somebody the ECNs will usually bust any price that is greater than 5 or 10% away from the previous close. So if you want to try this, make sure your price is 4.99% away from the close. And make sure that there isn't news to drive a stock through your limit price.