Trading the Market on Close strategy ?

W

wercurna

I am very curious as to how the MOC strategy really works i thought it didn't work any more but latley i have been talking to a couple of traders that make good money doing the MOC so i wanted to start a thread about this strategy.

let's see
 
It has to do with finding inbalances in the NYSE stocks and then placing a MOC order, i don't know how it goes exaclty but i do knoiw it has to do with imbalances at close.
 
werc,

Just for starters, try searching the site for MOC orders, or market imbalances, and look specifically for posts by Don Bright. He has talked about that, perhaps not as a specific post, but within the context of a discussion. You might be able to glean some info there.

Hope this helps.

:)
 
basically about 3:50pm, you see an imbalance in a listed stock, say a bunch to buy on the close, you enter in an order to help the imbalance (ie selling) then buy the amount you entered in to sell. The spec will naturally close the stock a little higher due to the fact that he has to sell the stock and you hopefully get a few cents out of it.
 
Prescott, that is slick.

Just to be sure that I have it clear in my pea brain...

About 3:50 or so (not etched in stone, but close), you see a market imbalance to buy 50,000 MOC.

I place an order to buy 1000 now, and an order to sell 1000 MOC.

The thought is that the specialist is going to raise the price of the stock into the close to match as many orders as possible, so he doesn't have to take as many himself.

If this not accurate please correct me. And... how do I know if it is a buy imbalance or a sell imbalance, and what the size of the imbalance is?

Thanks for your help.

:)
 
I wanted get this up top for the west coasters to see.

Does anyone have more insight or experience with this idea.

Even more specifically, is someone willing to provide an answer to the questions I posted just previous to this post?

Thanks.

:)
 
The book ' daytrading into the millennium' mentions this strategy. If the buy/sell imbalance is equal or more then 10% of the average daily volume go long/short asap and get out with a MOC.
 
A market on close imbalance is an order the specialist has on hand to fill at the closing price. They come out at 3:40 and then at 3:50. You have to lock in your order by 3:53 and you can't cancel it. For example, T has a 3 millions sell imbalance come at 3:40, the idea is to sell the stock asap. At 3:50 the specialist will adjust the imbalance either to a higher amount or a lower amount in most cases, cause he may have filled the imbalance, or suddenly he may have a buy imbalance and you're dead. By 3:53 you have to send your MOC order to the floor, after that you can't cancel it, so the stock could move against you before the close and you could lose money even if it does pop on the close. So if the stockwas trading at $15 when the imbalance comes out, it may run down to 14.75 with all the people selling trying to satisfy the sell imbalance by buying back their shares on the close. But if there are enough MOC's put in, it could flip the stock to a buy imbalance or a much smaller sell imbalance and the stock could run up to say 15.25, and now you're out .50. At the close, if the original imbalance is still in effect the specialist could print it at $15, and you still lose .25. So it's not as easy as it sounds. There are specific strategies that need to implented to be successful, but just like regular day trading it take time to master. For example, some stocks are best left alone, and wait for them to pullback after the initial pop, others need to be chased cause they may keep going. Remember, there are 7 minutes in which you really have no control of the stock, and that's where it gets tricky.
 
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