Don's Openings, Part 5

3 fills, 2 winners (small loss in C ) ....+$600 (30 cents). I just post the number from my position window (before costs).

.9 envelope, adjusted GE down to the bottom third of the Pre-opening indication (goot thing today, since I did not get filled).

There was a lot of news this morning (GE, MO, TGT, LLY), and we want to be "aware" of the news, but not "feaful" of it. Remember, we Want to have some disparity in the morning for this to work.

Good Luck everyone...

Don
 
I've been following this strategy very closely and had a question I'd like to pose. (I'm a futures trader and somewhat unfamiliar with the practical aspects of trading listed.)

I watched around 13 opens this morning, and saw fills on three of those. One was LLY, which opened delayed...with news. The position would have been long in LLY at 56.50 to open. After a nice move to 56.80, I see futures leveling off, possibly getting ready for more buying. But let's say a trader wanted to start unwinding a 2000sh position at this point.

Since the open, the quotes have not shown more than 300 on either the bid or the ask. I'm trying to read the tape and see what it's doing. All of the other drugs are down off the open, DRG.X is starting to roll over. I'm looking to exit. Now what?

How do you unwind a 2000 share position with only 200 showing on the bid in a case like this? Do you take it off in pieces or put the whole thing out there?

Thanks for any ideas or suggestions.
 
when futures are indicated way down pre-opening and you get all your prices for your buys and shorts, what do you do when your short prices are below the close of yesterday? you're not going to get the opening print... do you wait for an uptick or not even enter those orders?
 
Originally posted by DaveN
I've been following this strategy very closely and had a question I'd like to pose. (I'm a futures trader and somewhat unfamiliar with the practical aspects of trading listed.)

I watched around 13 opens this morning, and saw fills on three of those. One was LLY, which opened delayed...with news. The position would have been long in LLY at 56.50 to open. After a nice move to 56.80, I see futures leveling off, possibly getting ready for more buying. But let's say a trader wanted to start unwinding a 2000sh position at this point.

Since the open, the quotes have not shown more than 300 on either the bid or the ask. I'm trying to read the tape and see what it's doing. All of the other drugs are down off the open, DRG.X is starting to roll over. I'm looking to exit. Now what?

How do you unwind a 2000 share position with only 200 showing on the bid in a case like this? Do you take it off in pieces or put the whole thing out there?

Thanks for any ideas or suggestions.
More...

If you check the time and sales, you'll see that 100,000 shares or more of LLY traded at that level....all the stocks we trade are high volume, large cap stocks...so we never worry about 2000 shares...that is a good number of shares to trades since it comes in "under the radar" for the most part.

I adjusted my LLY buy price to reflect the pre-opening indication that was disseminated by the specialist (so I missed it by 5 cents), my brother got in and actually sold his at 80 cents.

Reading the "tape" is more important than the "quote" since the inception of NX capabilities on the NYSE (they tend to reflect lower numbers for this reason).

Hope this helps!!

Don
 
Filled on 1 long, SII, held it too long (trying to let it run a bit more) and got out when it fell back toward the open.

SII +.05

whoo whoo.. let's party.. :)
 
Originally posted by trade872
when futures are indicated way down pre-opening and you get all your prices for your buys and shorts, what do you do when your short prices are below the close of yesterday? you're not going to get the opening print... do you wait for an uptick or not even enter those orders?
More...

Since we mark them "short" anyway, we will only be filled if they open above yesterdays close...which is unlikely (however,Citigroup did just that today.

If it is a big down opening, we buy bullets on our "likely" stocks (we wait to see if there is a wide enough range on the pre-opening indication).

Don
 
Originally posted by Don Bright

...my brother got in and actually sold his at 80 cents.

Reading the "tape" is more important than the "quote" since the inception of NX capabilities on the NYSE (they tend to reflect lower numbers for this reason).
More...
Thanks, Don! Yes, that does help. So, I guess the specialist doesn't want the NX to be active, so he's only showing 100 on each side. Or he'll give a couple of hundred shares to NX by showing 300. Is that right?

I went back and looked at the tape; I see what you mean! There was even a 20,300 print. I see three successive prints of 2500 at 9:46, 56.80. Hmmmmm, that's probably an opening orders trader's exit.

So, when I'm trying to get my 2000 shares done, what's the right thing to do? I know you've stated before that you'd rather not have the market come to you, so is it right to put 2000 LMT on that bid of 100 shares or .05, .08 below? I'm pretty sure you won't advocate a 2000 MKT order here. :-)
 
Don I'm sure you've discussed this to some extent before, but are your reasons for exiting you positions purely based on market indication and the tape, or do you have a certain profit or loss in mind.

The reason I ask is that on Wed. and Thu. it looked like you were only averaged about .08-.10 cents on your winners, but on Tues you took a .30 hit in GS.

Are you just just scalping on 2000 shares to make the quickest profit? If you are, how would you manage the losses when they go .30-.40 against you?
 
Originally posted by DaveN

Thanks, Don! Yes, that does help. So, I guess the specialist doesn't want the NX to be active, so he's only showing 100 on each side. Or he'll give a couple of hundred shares to NX by showing 300. Is that right?

I went back and looked at the tape; I see what you mean! There was even a 20,300 print. I see three successive prints of 2500 at 9:46, 56.80. Hmmmmm, that's probably an opening orders trader's exit.

So, when I'm trying to get my 2000 shares done, what's the right thing to do? I know you've stated before that you'd rather not have the market come to you, so is it right to put 2000 LMT on that bid of 100 shares or .05, .08 below? I'm pretty sure you won't advocate a 2000 MKT order here. :-)
More...

The tactical aspect of exit trades is generally the same for all orders. We rarely use Market orders (since only the Specialist can "match" these orders at certain prices), so entering a sell order at a price below the bid, or a buy order above the offer is the way to go. You will most likely get "price improvement" to the best price at that second.

Don
 
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