NYSE Specialists can only absorb, according to generally accepted hear say, the true opening round interest in each stock that is worthy of their attention. All additional interest is presummed to reaappear during the normal trading session as a limit or market order, so there is/are no worries that those spurned during the OPG/MOO round will be offended that their orders are/were not selected for filling.
At the posts, the Primary Specialist handles the most volatile stock or stocks of those assigned to his company and to his authority / rank within his partnership. The next runner up or junior specialists handle the other stocks assigned and these open in the first wave of stocks. They then, in prearranged fashion successively tranch their way through all their assigned stocks at that post.
In the few minutes before the generally accepted 9:30am opening, all facts that need to be considered are available to these Specs in order for them to mentally know where they intend to value and open each stock. One of those factors are designated interest.
Part of that designated interest are:
1) crowds at the post
2) news from the CEO, CFO or other "C" level executives
3) pubic, economic or political news or sector news like earnings or downgrades
4) OPG and MOO Buy order and Sell Short order interest in the underlying
5) other factors and proprietary trading experiences
If the Spec realizes that 200,000 shares are needed to balance pre-opening interest and he's not willing ot trade this from his reserve then he (might) assign it to, say all present OPG/MOO orders. Here's where these orders plays a role. If he has net 400,000 OPG/MOO interest, then some get executed and most do not. If he uses price as a basis, then those orders closest to his mentally designated price will be filled. If these orders are away from that price, then he will decide at what cut off he will fill this over interest. He also decides whether to fill these orders Short into a potentially rising day thus saving his reserve for the rally or the inverse selloff.
Those selected for fill are, as they say, trading on the side of the specialist. The presumption is that it is an edge.
The example of the trader (scroll up just last week on this thread) who got creamed over -$7,000 on the HMO stocks shows that this edge is used exclusively for the Spec's benefit and his reserve in the stock and not always in behalf of the trader.
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There are other factors that go on during the premarket preparation for the opening or re-opening for a stock but those factors stated provides a very good estimate of the inner workings of the process.
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some other factors that provide / presume to provide an edge
a) find stocks that are not primary attention stocks at each post
b) get second, third and forth tier stocks and widen out your selected stocks to well over 200 or 400 daily
c) get stocks that are not prime components used in other indexes
d) avoid news or story stocks
however with this understand that successively lower and lower net volume can be absorbed in these "non-primary" stocks. So some large size (4,000 share and 10,000 share and 20,000 share spread traders) will easily overwhelm the natural interest in the opening round. When this happens then all these OPG/MOO orders becomes its own market moving participation factor thus providing the Specialist with a near zero risk free trade, of which he can or then uses to his firm's advantage, and not necessarily to the benefit of the trader. This is when you're not trading on the side of the specialist but being traded by the specialist for his benefit. That's when your losses overwhelm all or most previous days/weeks/month's gains.
one other factor, is the amount of traders participating in this and similar strategy, even using automation to help them manage hundreds of OPG stocks has irreparably changed the game, as well as in many cases over whelmed the Spec's posts with too many orders or too much interest.
At the posts, the Primary Specialist handles the most volatile stock or stocks of those assigned to his company and to his authority / rank within his partnership. The next runner up or junior specialists handle the other stocks assigned and these open in the first wave of stocks. They then, in prearranged fashion successively tranch their way through all their assigned stocks at that post.
In the few minutes before the generally accepted 9:30am opening, all facts that need to be considered are available to these Specs in order for them to mentally know where they intend to value and open each stock. One of those factors are designated interest.
Part of that designated interest are:
1) crowds at the post
2) news from the CEO, CFO or other "C" level executives
3) pubic, economic or political news or sector news like earnings or downgrades
4) OPG and MOO Buy order and Sell Short order interest in the underlying
5) other factors and proprietary trading experiences
If the Spec realizes that 200,000 shares are needed to balance pre-opening interest and he's not willing ot trade this from his reserve then he (might) assign it to, say all present OPG/MOO orders. Here's where these orders plays a role. If he has net 400,000 OPG/MOO interest, then some get executed and most do not. If he uses price as a basis, then those orders closest to his mentally designated price will be filled. If these orders are away from that price, then he will decide at what cut off he will fill this over interest. He also decides whether to fill these orders Short into a potentially rising day thus saving his reserve for the rally or the inverse selloff.
Those selected for fill are, as they say, trading on the side of the specialist. The presumption is that it is an edge.
The example of the trader (scroll up just last week on this thread) who got creamed over -$7,000 on the HMO stocks shows that this edge is used exclusively for the Spec's benefit and his reserve in the stock and not always in behalf of the trader.
--------
There are other factors that go on during the premarket preparation for the opening or re-opening for a stock but those factors stated provides a very good estimate of the inner workings of the process.
------
some other factors that provide / presume to provide an edge
a) find stocks that are not primary attention stocks at each post
b) get second, third and forth tier stocks and widen out your selected stocks to well over 200 or 400 daily
c) get stocks that are not prime components used in other indexes
d) avoid news or story stocks
however with this understand that successively lower and lower net volume can be absorbed in these "non-primary" stocks. So some large size (4,000 share and 10,000 share and 20,000 share spread traders) will easily overwhelm the natural interest in the opening round. When this happens then all these OPG/MOO orders becomes its own market moving participation factor thus providing the Specialist with a near zero risk free trade, of which he can or then uses to his firm's advantage, and not necessarily to the benefit of the trader. This is when you're not trading on the side of the specialist but being traded by the specialist for his benefit. That's when your losses overwhelm all or most previous days/weeks/month's gains.
one other factor, is the amount of traders participating in this and similar strategy, even using automation to help them manage hundreds of OPG stocks has irreparably changed the game, as well as in many cases over whelmed the Spec's posts with too many orders or too much interest.
