"Nasdaq Weighs an Earlier Wake Up" http://online.wsj.com/article/SB10001424127887323478004578304480080073640.html [Nasdaq OMX] said it plans soon to start processing trades at 4 a.m. The earlier start time is a challenge to rival NYSE Euronext, whose electronic Arca exchange began matching bids and offers for shares at that wee hour in 2005. Nasdaq plans to make the change no earlier than March 18, it said in a notice to customers. The change is subject to Securities and Exchange Commission approval.
think about algos filling orders round the clock some day, maybe in 10 or 15 years from now, they would be spreading large orders over 24 hours. how insanely boring and quite would that make things. not good.
This is a nightmare for West Coast traders who are still prepping their day planner for the Market at 4:00 AM from 5:30 AM as we watch the madness with price discovery begin. One reason I started to trade stocks with low liquidity for a couple of my accounts was the profit I could make in Pre-Market as the Invisible Hand attempts to push stocks up to weird prices in Pre-Market. At 4:00, I see more issues coming forward but only to benefit the Professional Traders who will Short the out of balance price. I tried a different style of trading after one of my friends blew up buying a biotech he knew nothing about. The stock dropped from $75 to $35 and he and another phD in chemistry loaded up their accounts hoping for a dead cat bounce. All three of them told me to go long this stock, I had begun to realize often with terrible bad news with a biotech, the pre-market pricing is usually the best prices you will see as Market Makers are trying to hold back the Sunammi of Sellers. With $35,000 in Buying power left, let's call Trader 1 by the name of Joe, Joe used his 4x buying power and bought 2000 shares at $35.5 as the stock started to move up, he added another 2000 shares at $36.5 and thought he was a genious! He was up $2000 bucks in a few minutes and once the Market opened, he and Sammy and Goofy Trader were loaded up with "Bad Luck Biotech" and this stock began to wobble. The choir of pain from this trio was sad, they kept yelling at me to buy the stock, I said "I don't like this, I am going to short it now at $31 and they all start cussing me out and I shut off the Skype or Yahoo Instant Messenger! I shorted more at $28, $27 down to $19 and I covered at $16 to make $26,000 on a great trade, two of those guys I never heard from again. I know Joe with his $140,000 of buying power had bought more when this stock was tweaking between $27-$28 only to have GSCO sit on the offer and drive it down to $23. Joe was liquidated by Etrade's Margin Risk-Management at $15.20! Joe lost $32-$15.20 because he bought in Pre-Market and his buddy Goofy bought even bigger, this was his last trade before his Russian Mail order Bride ran off for good! Goofy kept averaging down with his $75,000 equity (4x$300,000) he held onto 10,000 shares all the way down to $13 before Etrade's Risk management caught his account. He filed for Bankruptcy and the third trader was only trading 500 shares because his account was down to $23,000 bucks, he called my land line and asked me what I should do at $20, I said "Get the hell out of this stock!" he sold at $20 and brought his account down to $16,800. I use to only trade from 9:30 AM to 5 PM PST (after-hours looking for price discounts by Day-traders wanting out of a good stock for a decent discount) because I thought the price action was more coherent but I lost potential money from all the Market Orders and crazy quick up-snaps, so back to 5:00 again! The above horror story is only one of the many I have experienced through other people's losses and my own stupidity thinking I could trade like a Market Maker when there is no liquidity on crazy stocks. I helped the clown from Texas turn his account back from $16,800 back to $180,000 in 2003 and you know what I got for doing that? He would ask me to send him jam and avocados from a couple of co-op farms I was involved in. This idiot never once sent me a gift or thank you card, finally in 2005 I changed my phone number and never spoke to that user again! Sorry to vent here, there are a bunch of users who will screw you over, try to front run you and attempt to break a stock to screw you with nano-caps and micro-caps. It's late and I am going trout fishing after I trade.
was it really worth it? even if it is(which i seriously doubt,because there ZERO activity in pre market now,even on most liquid ETF's such as SPY,IWM QQQ)-aren't they kind of late to the party? yesterday was perfect example-IWM -9:25 am EST- 40 K shares total volume(use to be 4M,back in a day). looks like they are desperate for every penny
This is nice and might enhance liquidity a bit but for clients at a good broker it wont matter much. ARCA pays a bigger rebate than NSDQ and allow native hidden orders as well (icebergs too), I see no reason to route NSDQ instead of ARCA