Market on close imbalances

Discussion in 'Strategy Building' started by cyborgtrader, Jul 31, 2006.

  1. This trade seems to wrork very well. Everyday the NYSE lists all its market on close imbalances at 3:40 PM. The trade is to run in and get on the side of this imbalance as soon as they come out. A computer program will make this easier. Lets say a stock has a buy imbalance of 200,000 shares. The trader has to quickly buy this stock and immmediately put out a market on close sell of these shares and hope that the imbalance causes the stock to spread up. As you do not kno wwhich imbalances will work, a computer program to capture all the stocks or all the stocks with big imbalances will increase your odds. This strategy is particularly useful during options expiration and the quarterly index rebalancing.
     
  2. rshuhart

    rshuhart

    Thanks for letting the world know and making it harder for the people (including you) who trade this strategy. The profit potential decreases as the more people know (as with any strategy). For the record, I currently don't trade this strategy, but was hoping to in the future. You just cost me some money.
     
  3. Surdo

    Surdo

    So fade 'em then, do the opposite of the imbalance since EVERYBODY is going to learn of this strategy and run out tomorrow and implement it.

    Hurry, I would run!
     
  4. rshuhart

    rshuhart

    if only I didn't have nubs for feet