What's the earliest one can trade single stocks? I never do it before 8am and in looking over some NYSE TAQ data recently didn't see any prints from before 8am at all. I also agree on getting some bargains on occasion (including times when the other party made a mistake.
if you use IB ... you can get access to Instinet starting at midnight PST premarket by the way ... if you place orders out there in the erroneous price error category and get filled consider yourself very lucky if the trade does not get busted usually if the price is more that a few % away from where it should be and the contra party is paying attn your trade will be busted ( that has been my exp. anyway)
Thanks Seth, I don't think I can trade that early with TradeStation but that's definitely smth to consider. (not that I wanna get up that early as I'm in the Eastern Time Zone ). As for the erroneous fills, what legal recourse do they have to bust those fills? Say the spread was ridiculously large and someone confused sell/buy and ended up hitting my limit by mistake. Legally speaking, he did send the order... Thanks.
Supposedly if the trade is more than 20% different than the prevailing market price, the trade will get busted. At least that's Island's rule, last I checked. So if you see a $10 stock offered below $8, and take the offer, the trade could get busted. The contra party would call their broker, and you would get a call from your broker telling you that the trade was busted. I believe that's how it works. If it's less than 20%, you may be asked politely if you would agree to bust the trade, and if you don't there could be litigation involved. I once shorted a stock at about 15% below the previous day's close, and my broker thought I made a mistake and called to verify that I wanted to have it busted. Now I realize that with a big enough news story overnight a stock can get offered over 20% lower, and it could get a little tricky. Let's say, for example, someone offered that $10 stock at $7 after a failed FDA review, and it traded at that price for the first trade of the day. If it ended up trading higher, could the guy selling claim that he made a mistake selling it so low? I'm not sure. Tradestation is available for trading starting at 8 AM EDT.
I use the the pre and post markets way more now than during the bubble. Its a lot thinner but its also the amateur's hour, and you can pick up and unload at amazing prices. You have to know the news and sentiment, through briefing.com or whatever, and then step in there. It's especially good after a big up or down day. You can short overeager buyers without an uptick (nasdaq), or pick up strong stocks 1/2 to 1 pt below the close. Many times I just send the stock back out as soon as I take it. I am always up and active before 8am ET. Those first trades can be way off the mark. It's good practice to see how Globex trades when the European markets open. That gives you a set of support-resistance pivots to work with, because many liquid stocks will wobble the same way, especially tech vs. NQ. You have to tell the difference between hidden size and amateurs. Take a little stock, even a hundred at a time, and see if you can reduce the offer. Try taking it all and see if it goes away or refreshes. Best to trade against the amateurs but with the size.
From Quicken's trading site (see the last paragraph): "Short sales during extended-hours trading For Exchange-listed securities, the uptick rule applies, as does the rule requiring an affirmative determination that the security is available to borrow. The uptick rule is applied against the Consolidated Quote System (CQS) closing / last trade prices, not the NYSE or AMEX closing price. The CQS reflects the last trade from all market centers trading listed stocks and disseminates this information until 6:30 p.m. ET. Archipelago quotes (the system used by Quicken Brokerage powered by Siebert) represent one of many participants which collectively disseminate last trade information to compile the CQS data. As a result, the Archipelago quote alone may not reflect the actual price at which a short sale may be executed. For pre-market trades, the closing CQS price from the previous trading day (i.e. 6:30 p.m. ET) is used. For example: 1. CQS close for IBM was 99.50 on a down tick. 2. In the pre-market session the following business day, the current quote for IBM in Archipelago is 98.25 x 98.45. 3. If a limit order is placed to sell short at 98.25, Archipelago will automatically reflect the order on the offer at 99.51 (.01 higher than the CQS close). 4. The order will only receive an execution if IBM trades at the price of 99.51 or higher. Short sales for Over-the-Counter (OTC) securities and Exchange-Traded Funds (ETFs) can also be accepted during extended-hours sessions, but the uptick rule does not apply for these securities, so OTC stocks and ETFs may be sold short without reliance on the closing bid. An affirmative determination that the security is available for borrowing must still be made for OTC securities and ETFs."
Hopefully this is not off-topic: I missed RMBS rally yesterday almost completely, as I was away from computer, and I didn't notice before, that RMBS could go so much up. Was this move in any news one hour or so before? Briefing didn't have it (for instance) .... And this is again within the topic: Was is possible to profit from after-the-close movement in RMBS yesterday? Lojze