I make the following statements based on empirical data over the last eight months. I send OPG orders on about 100 stocks every day. I have automated a method for sorting out and highlighting those stocks which are indicating outside of the orders that I've sent.
So, each day, I can see which of my 100 stocks are "out of line" based on the specialists indication. Some days the list is as few as 10 stocks, others, as high as 40. As a rule, I do nothing with this information before the open, just make a note of it, and watch how they open. Even on earnings days, I will still send orders on that stock, just a smaller number of shares to mitigate risk somewhat.
Generally speaking, the greater number of indications suggests that I will have a higher than average fill rate on that day, *but* it doesn't follow that I will be filled on those stocks which are indicated. Some do, and most don't. I haven't seen any correlation based on a specialist's indication for a given stock (in earnings season or out) with whether or not I'll get filled *and* more importantly, whether or not the stock will trade profitably off the open.
Some of my best OPG trades have been off of stocks with large indications....as well as some of my worst.
So, I guess I'm saying that indications might make a useful "flag" for someone to watch that stock on the open, but in general, I don't think it makes for a very useful trading signal. That I'd leave to managing the trade once you've been filled.
So, each day, I can see which of my 100 stocks are "out of line" based on the specialists indication. Some days the list is as few as 10 stocks, others, as high as 40. As a rule, I do nothing with this information before the open, just make a note of it, and watch how they open. Even on earnings days, I will still send orders on that stock, just a smaller number of shares to mitigate risk somewhat.
Generally speaking, the greater number of indications suggests that I will have a higher than average fill rate on that day, *but* it doesn't follow that I will be filled on those stocks which are indicated. Some do, and most don't. I haven't seen any correlation based on a specialist's indication for a given stock (in earnings season or out) with whether or not I'll get filled *and* more importantly, whether or not the stock will trade profitably off the open.
Some of my best OPG trades have been off of stocks with large indications....as well as some of my worst.
So, I guess I'm saying that indications might make a useful "flag" for someone to watch that stock on the open, but in general, I don't think it makes for a very useful trading signal. That I'd leave to managing the trade once you've been filled.