Don's Openings Pt. 2

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vhehn,

Actually I think that you have misundestood my point. I understand perfectly well how the OO strategy works on the NYSE, what I am merely asking is that, given the more transparent visibility of NASDAQ pre-open prices, can the strategy be extended to the NASDAQ in some way. Or stated another way, why will this not work on NASDAQ.

I used to do opening strategies on NASDAQ stocks last year and was quite successful, usually fading the direction of stocks that were gapping on no news. Unfortunately it has not bee working that great recently.
 
The point of opening orders on the nyse is to participate with the specialist. Since there is no specialist for naz stocks, all you are doing is making a bet that the gap will come in, which can be a valid strategy on its own, but is not the same as what we are talking about here.
 
lescor, point understood about participating with the specialist. It also seems to me that part of the success of the strategy relies on other market traders (arbs, index traders, etc) who will look to profit on trading the stock back to its fair value (or maybe I am misunderstanding this).
 
"vhehn,

Actually I think that you have misundestood my point. I understand perfectly well how the OO strategy works on the NYSE, what I am merely asking is that, given the more transparent visibility of NASDAQ pre-open prices, can the strategy be extended to the NASDAQ in some way. Or stated another way, why will this not work on NASDAQ.

I used to do opening strategies on NASDAQ stocks last year and was quite successful, usually fading the direction of stocks that were gapping on no news. Unfortunately it has not bee working that great recently."

ok i will try to explain it as i understand it. the theory behind the oo order is this.the specialist can see order flow.he can see a million share to buy (or sell)order before he has to fill it.he thinks wow thats a lot of stock and i probably should open it at x.he decides that just to be safe and guarantee himself a profit he will open it .25 or whatever higher than it normaly would.he opens the stock and as soon as that first order is filled the stock drifts back down to where it should of opened.
where you come in is by the rules the specialist must fill the first print all at the same price.that way you get to take advantage of the inflated price and also the drift back to fair value.
 
......after your remarkable returns from yesterday how did you do on today's OO strategy? Oh and how are you recovering? Hope your feeling better.

Good trading all....

mrktwiz
 
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