why do the black boxes turn off at 4pm?

Discussion in 'Trading' started by silk, Feb 7, 2007.

  1. silk


    I would think that if they are willing to arb every cent during the day, they would throw out some bids and offers around the closing prices on the ECNs after 4pm. But they don't. Alot of times i don't get out at 4pm and would like to close out some posiitons after 4pm. But there is just no liquidity within 20 cents.

    Often i would like to trade at 4:01 if i miss the close, you would think the specialist or someone could throw out some bids/offers around the closing print for late stragglers to close out against. But no luck.

    And how come no one wants to make a market in XOM premkt or ah's considering thats a 400 billion company. But they don't.

    Alot of ADRs that trade overseas have some sort of ARB program making a market from early premkt in NYSE. Example, BHP, MT, TS, RTP, BP ect. All of these have an active market with bid/ask very deep premkt. I assume that someone is arbing the local exchange price?

    Surprising that XOM doesn't have more of a 24hr mkt. I would think that an early riser over in Asia might have an interest in trading XOM in our ah's ect. Or maybe XOM is listed over seas and they just trade it there?
  2. The Black Box union demanded and won concessions relating to work hours and hourly compensation. :p

    My guess Silk is most arbs figure that the only AH trade they'll see is the pick off on news. Not to mention if you have nowhere to go (and I know you have access to every imaginable venue) why would an arb have a place to lay it off.

    And yea, most large cap stocks are listed on Euro-Asian bourses as well.......
  3. I've done some of what you describe Silk, in select ETF's right after the close. The problem is that yeah, you can get filled at what seems like a nice price, but then you are very likely to hold the position overnight because no one else is playing with you. Making an easy .20 after the close might not look so great when you can't get out for another 17 1/2 hours.

    Pre-market is more palatable, but the need for liquidity is not so strong when the market open is not that far away.
  4. I once had to liquidate some positions after hours and had to give them away at horrible prices...but black boxes were fighting tooth and nail to be the highest bidder..they just came out of nowhere like bloodthirsty pirana fish on a feeding frenzy...don't forget that you're not always seeing the true bid/offer afterhours (or during market hours for that matter) due to hidden orders.. Sometimes if you try to place the highest bid on a stock afterhours, ull get immediate competition..ie a black box will outbid you repeatedly up to a certain level , above which it wont try to outbid you..
  5. they turn off cos the daytraders they're taking money from go home.