I've never used an OPG order but I can see how using them might be potentially profitable. I'm wondering how many traders out there use this type of order, and what kind of experiences you've had.
I can see how OPG orders might be of value in the face of extreme news driven price action (ie, the specialist is forced to be the buyer of last resort), but what other situations might OPG orders be of use? Recently I've been hearing about calculating fair value for stocks and ETFs, then using OPG limit orders to buy at a discount to fair value. Is this a realistic senario? And if so, how does one go about calculating fair value on individual issues?
All your questions can be answered by reading the two threads entitled "Don's opening orders". The idea is to get on the same side as the specialist on the first print. If he has a buy/sell imbalance at the open and is forced to participate in the first print, he's going to open the stock far enough away that he'll be able to make a profit. May or may not involve news events. Not going to work with etf's because they trade pre-market and are already going to be in-line with the futures. I use the s&p emini contract a couple minutes before the opening bell in calculating fair value of the stocks. You are going to need a broker that allows true opening only orders, meaning if you are not filled on the first print, the order automatically cancels.
Why use OPG orders when you can just wait for the stock to open and then react to what you think will happen next?
Well Vinny quite a few reasons. First I can get my shorts off (sorry for being so vulgar) on the first print. Might not be able to get another uptick. The second thing is a lot of times the first print IS THE BEST PRINT. Robert
Np upticks? Well..Isn't that the reason for using conversions/bullets? I truly believe that if you are not able to use bullets in daytrading, your profits would decrase by mor than 50%. If you are in some firm that does not allow you to utilize bullets, I say you need to move. Second, the specialists are totally aware of this game played by the daytraders. How many times have you been in a position where the trade goes against you right off the bat, take your 50 cent or $1 loss (because that was the next print!) only to have the stock go right back to where it opend and continue to go from there? The specialists are not stupid ... so you need to be extremely careful with these opening only trades. Having said that, this is my bread and buter....
I honestly don't know exactly what strategy you folks are talking about...but my opening trade consists of watching those listed stocks that open late with gap up or down. But on any given stock that gaps up or down, I will usually get filled anywhere bewteen 0 - 5000 shares depending on where they open the stock. This is usally why I do best during earnings seasons because that is when there are most # of delpayed stocks. This quarter, for example, there were anywhere bewteen 3 - 10 delayed stoclks at any given day during the earnings season.