How does Don Bright's market opening order strategy work? I've come across various posts that reference it. I've even noticed his Journal on daily outcomes for the last sven or so years. However, I have yet to find anything that lays out this strategy's methodology. Can anyone help? Walt
I think he said in one of those theard that it has something to do with being on the same side of the speacialist
it is all there in the threads from 2003 on... i learned it from the thread ...so more than likely you can too... what you are doing is trading the opening imbalance against the paper with pricing help from the specialist... so easy a caveman...i mean a trader can do it...
There is ample information already available on this board about Bright Trading and their opening only strategy. In a nutshell, they are providing liquidity to the marketplace, posting buy and sell opening-only limit orders outside of the expected opening price. These orders are automatically canceled if they are not filled at the open. If an order is filled, it is often the result of a "trade through", where the specialist is obligated to fill the limit order at the more favorable price. One can often turn over the filled portion of the order a few moments later at a small profit. In the old days this was done by hand, but in modern times it is usually an automated process. Try using the search function of this site, or sending a private message to Don Bright directly if you like.
I absolutely don't mean any offense, but I find the amounts they're making off that strategy rather on the low side - and no it's not only the USD that makes me think so... Sure, I get that it can be a nice strategy to complement other strategies - it doesn't take that long, can probably be automated to a degree, and then you're off to work other strategies. But focusing on a strategy that yields 500, 1000 maybe 1500 usd makes me wonder a bit - there are also losing days. (Sure, for 15-30 minutes work it's a nice wage, but hardly big dollars). Is there a limit to the size you can push around on this strategy? I remember one time when someone mentioned one of their trades, I think the stock was Coca-Cola, and I looked up the size trading on the opening print. It was only like 10-15.000 shares, and obviously you can't take too many shares without moving the market and removing the opportunity. Comments?
Outside the opening range? So if a stock closed yesterday at 50 and was expected to open at 45 they would place the order for 44.50. Or would they place it within the 5 dollar gap at 46 and receive the 45 fill? Also how does one get a good idea of where a stock is going to open? Thanks
Contrary to some people's ideas, Don Bright did not invent opening orders. His big brother didn't invent them either. It has something to do with a "floor trader's business model utilizing a million or two dollars of capital (used, not abused )" You apparentaly can't do it at retail firms. SLK, now GOLDMAN SACHS. A few hundred dollars a day, no biggie. Balance Sheets! Seriously, it's a simple arbitrage against a theoretically mispriced opening print. The opening order threads have been continuously ongoing for over 6 years now. Some searching will find what you are looking for.
The strategy, and various offshoots of it, have made me anywhere from $50,000 to $400,000 each year for the past 5 years. Maybe not the "big dollars" you make, but it pays the bills.
I automate mine. Wake up at 9:25, press the start button and usually out of positions within a couple to a few minutes (if I get filled at all) unless the trades look like they'll continue to go my way for a while. And there are plenty of shares to go around. But I try to get fills with a lot of stocks using few shares instead of a few stocks with lots of shares.