How are these gaps up possible ? F up 5% on 1200 shares

Discussion in 'Trading' started by zanek, May 10, 2010.

  1. The big thing to understand is that you don't necessarily need buying/selling to move a stock up/down. There are situations where *poof* all the sudden a new area of price is agreed upon by folks willing to buy and sell. This can be based on new information like earnings or just based on fair value calculations and movements in the overall market.

    This happens every morning when stocks gap a little bit -- you can get an idea for how it works in the opening orders thread. Folks trading OPG take the closing price from the previous day and, based on how much the futures indicate the market will open up or down, come up with a guess on what the fair value of a stock will be. Once they have this guess, they put offers in x% above that price and bids in x% below that price. The idea is that they can occasionally get a very advantageous entry price selling above or buying below fair value.
     
    #11     May 11, 2010
  2. Obviously you don't understand how markets function...

    If Ford closes at $9.00 Friday and Sunday night, it's trading at $10 in tokyo or someone is bidding $10.50 in London, why should I sell it to you at $9.00 on Monday morning??? So you can sell it to those people for an immediate profit?
    Markets are round-the-clock. Practically everything is traded everywhere at any time on one exchange or another.
     
    #12     May 11, 2010

  3. That first line of yours is rich. Too bad you're not. But with 2400 posts, "obviously" YOU understand how markets funk shun.

    The answer to your question about Monday morning is : VENUE.

    Inter-continent arbitrage is only in your dreams, particularly regarding 1270 shares at what, 12 ish.
     
    #13     May 11, 2010