I've been watching a few such as FLR, LNN, WLT. They seem pretty treachorous to me and I've lost some cash on them. I was just wondering if there is a strategy for them or is the specialist just cleaning everyone out on them. Thanks.
from what ive seen theyre tricky names, tape and book don't look very clean to me but like anything else at the right moments there's opportunity. I've been having better luck with PCX going for 50-70 cents on 200 shares. Names like LNN i make money on when I trade purely on momentum and feel. FLR is also quite tricky, I like trading it around certain levels and sometimes in capturing panic in the morning. If I take 500 shares on it, I'm feeling really ballsy. It really is all your style... but if youre giong to trade those stocks short term, just due to the spreadiness of the stocks I'd say you have to have decent tape/book reading skills... the names you gave are not the easiest by any standard. What are the easy names? That's the million dollar question =)
Yes! I love the $100+ stocks, and I especially love the high volatility ones. These are the best stocks to make 5+ points a day on. Others like MA, all of the fertilizers, the coals etc etc. I know this is after the fact, but my biggest score this year was yesterday on LNN. Perfect double top, excessive run-up, industry w/o big multiple, it was a trade made in Heaven!!
For you prop traders on a per share commish... Aren't you better off trading higher priced stocks.? The same percentage move takes less shares.
no you are better off consistently making money. i thought that way when i first start off at my office and it isn't the best way to approach things.
trade them like you would trade anything else. drop down your size due to volatility and quit thinking about things from the specialist screwing you perspective. the conspiracies really aren't out there like you think. further, "specialists" technically don't exist anymore. they are now called designated market makers. oh how electronic we have become!
I ran a screen on $100 plus stocks with a limit of $500 and there were 72 on the NYSE. I haven't traded them a lot but notice that WLT will "somtimes" bottom out in the first hour and then run $2-$5 over the trading session. But man if you look at the daily charts there are some big moves out of the current range. I call them a "suck out". I wonder what happens. Do all bids and offers dry up? On the candle chart the wicks are huge. Man these stocks move quick. Also the bid and offer move way out of range of the last sale on the time and sales. I'm still learning but these stocks are intriguing to me. I mean, how do you justify what happened to LNN yesterday? Take a look at the five day chart. What a huge move. I would have hated to be on the other end of that one!
The three stocks are healthy. Thing to work out is the timing. It worth to have a look at this thread, AHG method.