Discussion in 'Trading' started by Spark, Jul 31, 2002.
LOL.....I see now. Interesting strategy.
can u place an order while the stock is on halt?
No, it will be rejected.
Like Dustin said, this strategy was good a couple years ago. There was about a 2 month period in late 2000 when I was doing this, and I'm not kidding, 3 times out of 4, I was getting the very first shares after the halt. Not some of the first, THE first. I couldn't believe it at the time, but like all good things it came to an end. I remember getting short on a stock that was trading at 84. I got all the shares, and I bought them back at 60 like a minute later. It was only 200 shares, but it was a real quick $4800.
The problems with this strategy are as follows
1) Again as Dustin mentioned, you'd better be right about the direction. I got burned on XLNX warning twice, when it actually traded higher after the warning, for about $10K total in losses.
2) The trade might get busted. Sometimes I would short the stock, then buy to cover, and the stock would continue to move downward after I covered. I didn't care; I was out with a profit. Until my broker called and told me that my short trade had to be busted because they accidentally released it before the halt. Now I'm long a stock that's going south.
3) You are placing orders so quickly, you might get multiple fills.
While this isn't a problem if you're right, you will get killed if #1 or #2 above happens to you.
4) It's stressful! (At least it was for me.) That's the main reason I quit this strategy. (That and I could no longer get the early shares)
So YOU were the guy beating me to the shares! lol
If I remember, you use Cyber? I believe that Cyber was especially well set up for that strategy.
My best one was 9+ points on a few hundred BRCM after a split announcement. I only got whacked once when I read the PR that was good, but evidentaly missed the PR that was really bad. I think I lost $7 on that one.
Well, maybe when I couldn't get it working anymore, it was because you were taking all the shares.
I did have an account with Cyber, but when I was making money with this, I used a Redi Plus broker because they had the most extensive short list, and I made money on the short side more than the long.
Actually I remember trying it with Cyber once, and it seemed like the software wouldn't let me make multiple attempts on one trade. At least, that's how I remember it. Apparently I didn't have something set up right.
BTW, regarding that time you made like 1000% in 8 months a couple years ago...were halts included in that, or was all that just scalping JNPR?
Hey mjt, yeah , it's stressful.
And how come you can't get the early shares anymore?
I think some crew has a deal with ISLD and get's 'opened' before us slobs. How do I know that? Because I get 'halt' messages even while shares are going off on ISLD. Usually about 2 or 3 seconds later , I can place trades, long after the 'good' shares are gone.
May need to ask the SEC and Nasdaq to check this out.
That was just JNPR, and I think it was more like 800% from June 2000 to Feb 2001. By then I wasn't doing the halts anymore.
I don't know whether this is still the case, but ISLD used to open the stocks up for trading after the other ECNs. It would usually be just a few seconds, but I knew for sure that the ECNs opened up the stocks individually because on a few occasions it was several minutes between when all the other ECNs opened the stock for trading and the time when Island did. On one or two occasions those Island bozos forgot to release something in the postmarket, and it didn't trade until the following morning, even though it traded through the other ECNs.
So you have two factors: 1) the ECNs wouldn't necessarily release the stock at exactly the same time, and 2) Island would usually open the stock a few seconds after REDI, INCA etc. And at the time of release, you would see all these REDI offers pile up that were lower than the highest ISLD bids. And a few seconds later those bids disappeared.
So here you are trying to short a stock through ISLD, but Island hasn't released the stock yet. Finally Island releases the stock, but REDI offers are given priority over yours. Why? Because they were already there, how can your order possibly jump ahead of those orders that were already sitting there? Of course since REDI is proactive, those REDI offers that were there would cross with the ISLD bids you were trying to hit.
At least that's my theory.
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