Opening Orders - 2009

[Shreddog]

Quote from lescor:

Don't be so quick to assume it's a free money strategy. I have yet to see Don post the details of a trade where he's short on the first print and down a couple thousand bucks on the next one, but trust me, that happens. If you think you'll just control your losses with stop orders, think again.

If you think you can make x $ with the dow 30 and a multiple of that with more stocks, don't underestimate the blow out risk when 30% of your orders get filled and you're on the wrong side of almost all of them.

Very well said. OPGs are like picking up nickels in front of bulldozers. When things go wrong they go very very wrong. The last few weeks have been some of the best OPG trading of the year. IMO it is not coincidence that Don decided to post some stats right now.

Overall this is been a lousy year to trade OPGs. I am still red on the year on them, though that was mostly self-inflicted. Take out one day in January with a large error and they've been about a scratch this year. I've kept trading them out of habit as much as anything. Old dogs like their morning routines I guess. I was "this" close to shutting this strat down last spring.

"Just keeping it real."

 

[ericyyy]

This strategy is a lot of work each morning. Especially if you have a couple of hundred stock and you like checking the news and the premarket. Agree. This is far from free money.

Stop orders are by far one of the worst things to use in this strategy. If you can't stand some pain don't play.

But don't be so scare of the worst day scenario. Your biggest winning days are just as good.

IMHO

Regards,
Eric

Quote from lescor:

Don't be so quick to assume it's a free money strategy. I have yet to see Don post the details of a trade where he's short on the first print and down a couple thousand bucks on the next one, but trust me, that happens. If you think you'll just control your losses with stop orders, think again.

If you think you can make x $ with the dow 30 and a multiple of that with more stocks, don't underestimate the blow out risk when 30% of your orders get filled and you're on the wrong side of almost all of them.

 

[Don Bright]

Quote from ericyyy:

This strategy is a lot of work each morning. Especially if you have a couple of hundred stock and you like checking the news and the premarket. Agree. This is far from free money.

Stop orders are by far one of the worst things to use in this strategy. If you can't stand some pain don't play.

But don't be so scare of the worst day scenario. Your biggest winning days are just as good.

IMHO

Regards,
Eric

Yes, it does take some time in the mornings... some of the data that is supplied (morning logs) each day do help with news, earnings, etc. help speed up the process.

I don't use stops either, but I rarely put in more than 25-30 stocks. We do have various ways of using the automated stops (only trigger if voume = xxxx or you can have 100 shares trade to signal you at a pre-determined price...some guys really like that.

Overall, still one of our highest probability strategies. Especailly good for new people who haven't had time to hone their overall tapereading and market skills.

Got here kind of late today, catching up on "stuff" - no fills on the opening. (Stupid starter blew up in my car as I tried to start it in my garage this morning..scared the hell out of me, LOL).

Back at it tomorrow.

Don

 

[EMZ]

I’d echo some of the comments above, both positive and negative.
I’ve been trading this strategy for about 1.5 years. This year it has been a struggle. Last year, especially during fall, it was good.
Ofc there were the usual operator and/or software glitches, but on avg the numbers have not been great this year.
Yes it does tend to get you in a position with an edge, but also when it goes wrong, it can and is brutal. Stops can cut both ways, you can, and will be spreaded at the worst print of the open wave a great deal of times.

One other possible issue to consider:
With so many traders using this strategy, -if you add up traders from all firms, and retailers, at least few dozen, the number may very well be over 100- then take the avg size per trader (some may trade 100 shares, but quite a few are in the 1000 and way above) and look at the usual or even unusual suspects of stocks, there is certain amount of dilution.
When you get an open print, lets say of 35k, then how much of that is specialist participation? Is he just matching the dozens of 100-1000 plus lots form traders who use this strategy without him participating at all? A possible example, XL today or CPB etc.
And if the specialist is not participating as much, if not at all, does he/she really have the added incentive to quickly influence/move the stock the other way, which is the basis of this strategy?

Yes it does provide an edge at the open, but is by no means as easy as it may appear.

Thank you all for putting in the time and effort to post comments and insights, in this thread, and all the previous OPG related ones.

 

[Don Bright]

Quote from ericyyy:

Thank you.

It is very useful to see these data. I appreciate it. Now i know I'm missing out. Was wondering if this can handle like 1000+ stocks instead of just the dow30?

Regards,
Eric

I think we've run it with 512 stocks, not 1024 "max" for single user ID.

Don

 

[total_keops]

August monthly recap.
Traded 5 days.
26 fills, 5 longs, 21 shorts, 19 winners, 3 losers, +0.12 average.
Mostly all on the expiration. Close to a decent month even with only 5 days!
I am now officially out of here. Stopped trading the OPG cuz I got other projects going on.
Good luck everyone and have fun.

 

[trend2009]

I guess Open order almost dead. anyone has ideas how it is going these days?

Quote from total_keops:

August monthly recap.
Traded 5 days.
26 fills, 5 longs, 21 shorts, 19 winners, 3 losers, +0.12 average.
Mostly all on the expiration. Close to a decent month even with only 5 days!
I am now officially out of here. Stopped trading the OPG cuz I got other projects going on.
Good luck everyone and have fun.

 

[total_keops]

Quote from trend2009:

I guess Open order almost dead. anyone has ideas how it is going these days?

I did not trade OPGs long enough to tell if it's better or worse, or if it's dead!
I dont quit because I dont make money, I have better opportunities/priorities with my time. Lately it was kind of hard but I was still profitable. The month I was on red was because of two days where I had software issues on my side.
It's really not easy but there is something to do. You just got to understand the idea and when you do, you get why the profitability goes in waves and why last expiration was really good.
Maybe the fact that they publish the imbalance numbers had an influence, I dont know.

 

[Fib Gridsman]

If the OPG strategy is not dead, the edge has gotten VERY thin at best.

 

[trend2009]

I guess this site also makes contribution to its demise. But amazingly, the strategy only wanes out after so many years don has taught this strategy in his class and here. People may still be able to make a few dimes from OPG. but given the efforts and missing opportunities in the first half hour of the morning session, this strategy can best be described as a condolesnce for the labor of the trader.

Quote from Fib Gridsman:

If the OPG strategy is not dead, the edge has gotten VERY thin at best.