Don's openings Part 4

[MartinWeinberg]

Originally posted by TonySanDiego
Action was no good so I tried to bail using NYSE+ ... AT THE POSTED BID. (I think it may have been a 1 X something bid)...What good is NYSE+ if it only works when you don't need it?

A few points...

1. If it was clear to you that the price was dropping, then it's likely that it was just as clear to all other traders who were long the stock.

2. There may have been many others who NX'd at the bid before you did.

3. Market orders take precendence over limit orders.

If you're wrong on a trade, and you need out NOW, then a market order is often your best strategy. If you try to mess around finessing a limit order exit, you can be left in the dust chasing it down (as you experienced).

If the bid doesn't drop, and you used a market order, then the worst you'll get is the bid, which is what you were going for anyway. If the bid does drop, at least you'll be closer to the front of the line for stock when it does get doled out to the market orders.

NX limit exits are fine when the price is holding fairly stable, or there's a bit of size on the side you want to hit, or you're going for a profit-taking exit.

 

[theShadow]

anyone agree?

Now that the specialists can "play" with the orders during low volume openings.

 

[Don Bright]

Originally posted by MartinWeinberg


A few points...

1. If it was clear to you that the price was dropping, then it's likely that it was just as clear to all other traders who were long the stock.

2. There may have been many others who NX'd at the bid before you did.

3. Market orders take precendence over limit orders.

If you're wrong on a trade, and you need out NOW, then a market order is often your best strategy. If you try to mess around finessing a limit order exit, you can be left in the dust chasing it down (as you experienced).

If the bid doesn't drop, and you used a market order, then the worst you'll get is the bid, which is what you were going for anyway. If the bid does drop, at least you'll be closer to the front of the line for stock when it does get doled out to the market orders.

NX limit exits are fine when the price is holding fairly stable, or there's a bit of size on the side you want to hit, or you're going for a profit-taking exit.

I need to clarify something here. There is often confusion about "Market" vs. "Limit" orders (not including NX). We teach our people to always use limit orders, since market orders are "batched" by the Specialist (meaning the clerk at the computer cannot "fill the order"..)...so you risk a slight time delay using market orders. You see, the Specialist is the only person who can determing "what the market price is." So the clerk simply hands him a list of the market orders, buys and sells, and they "match" and "batch" the orders quite often.


If you place a limit sell, below the bid, then you can be filled at the better price by the clerk, and either way you get the best price at that moment. Not trying to argue with Martin, his other points are valid, and we often have some confusion about the use of market orders.

Sorry about "HI" Tony....keep plugging away...take HI off your list....

Don

 

[TonySanDiego]

Thanks Martin, Don.

Still trying to get used to the "specialist system". I guess the specialist wasn't on my side today.

Nothing wrong with HI. I got some out of it the other day. Market was just weak today, and HI wasn't going to swim against the tide.

Learned something else today. Need to check Briefing.com after I finish getting the orders into the system. I had always done a last minute check of Briefing just before I push the button for entering. ( a several minute process, since I am putting in a "lot" of orders)

Today MCD had bad news that hit after I had done the last check for news. (about 6 min before open) Thank heaven I missed it long by 2 cents. :eek:

 

[TonySanDiego]

PS

Do you think the specialist gapped HOT far enough today?

I didn't think that the news was THAT bad. Would have sure liked to have gotten that opening. But, it was off my list because it did have some news.

Any rules or observations about when the specialist gaps a stock "too far". Does anybody try to catch them?

 

[lescor]

There were a few on my list today that had some news, but not what I considered to be that bad. I just widened the envelope in those stocks to 1.5-2%. I was also lucky to catch the mcd news right before the open. On HI- he used to be such a great stock to get short, but lately has been a loser, and the specialist is rough, he'll gap you like nobody's business and will hold orders. And when you see 1 on the bid or offer, especially when the stock is moving, you almost certainly won't get a fill with nx. Putting up 1 is the specialist's way of basically turning off nx. That applies to all stocks, not just HI.

4 fills today, 3 shorts, 1 long. 3 for 4, +.23.

 

[MartinWeinberg]

Originally posted by Don Bright


I need to clarify something here. There is often confusion about "Market" vs. "Limit" orders (not including NX). We teach our people to always use limit orders....If you place a limit sell, below the bid, then you can be filled at the better price by the clerk, and either way you get the best price at that moment
Don

Don:

Very interesting. Can I ask you a few questions regarding this? (All questions assume you are currently long, the market is turning down fast, and you wish to exit asap with the smallest loss)

1. How far below the bid do you target the limit order?

2. Is it possible to target too low?

3. What if, after your limit order was entered, the specialist starts printing below you and you realize that you were either too late or too high in your limit target. What then? Do you try with another (lower) limit order, or do you now go market instead?

 

[egusc]

My opinion is that the open only orders are drying up very fast. Not sure why, maybe 100s of bright traders putting in thousands of orders for 2,000 shares and lookin to cover right after the open. or millions of ET trader placing 100 share orders, or just less volitivity at the open compared to a couple months ago so the open is not as far from the close, so there is less up side. For a while early in the summer open orders were like printing money. Now its a challenge, with some huge losers.

I never take an open order off because of news. I just use a HUGE envelope. Either i place my order inside the indication or use about a 3% to 5% envelope. These are still working most of the time.

I am tryin to come up with a strategy to trade against open only orders that tank quickly. I have avoided all stock with any news story on yahoo.

I want to try the market on close strategy but need a source for the imbalance. The dow jones new service that i use does not seems to show them.

Good luck to everyone,

Eric

 

[rtharp]

Originally posted by TonySanDiego
Got 1 fill long.. HI.

Action was no good so I tried to bail using NYSE+ ... AT THE POSTED BID. (I think it may have been a 1 X something bid)

Well you know the rest..... thief specialist held the order for dang near a minute, then dropped the bid right away from me by .20.

Tony

If you are trying to hit a bid and it is only showing up 100 shares NYSE + is invalid. That's part of the rules.

Robert

 

[nitro]

Originally posted by TonySanDiego
...Nothing wrong with HI. I got some out of it the other day. Market was just weak today, and HI wasn't going to swim against the tide. ..

Heh,

HI is a seven headed monster my man...I trade it too, but I am always prepared to get impaled and get a new asshole.

nitro