StockFetcher Forums · General Discussion · After hours bid/ask price real?<< >>Post Follow-up
glider
59 posts
msg #43654
Ignore glider
5/12/2006 2:25:36 AM

I sometimes put in an overnight buy or sell for a stock. The prices can be way out of whack. For example, a stock closed at $2.30, but the ask is $11. There are many examples like this. Is it safe to put in an overnight buy in this case. I know they correct themselves at open but I'm wondering if anyone ever got caught paying an exorbitant price in such a situation.
Thanks,

Glider


heyen
124 posts
msg #43655
Ignore heyen
5/12/2006 2:42:01 AM

sure, if you place a market order price might be a little hefty.
in pre and aftermarket always use limit orders!
if a price is way out of scope (like more than 100% above close) and there is no volume - your broker might bust a trade to protect you. but trading in pre and after market is usually very illiquid and therefore something risky.

so just place limit orders GTC at your desired price.


glider
59 posts
msg #43660
Ignore glider
5/12/2006 10:12:13 AM

heyen,

Thanks for your comments. That's where I'm a little confused. I'm putting my order in pre-market to trade at the open. At least that's my intention. I don't want to trade pre-market. But there's no OPEN choice when I put the trade in the night before, only a MARKET choice. I've done it a few times and even though the bid/ask prices have been skewed overnight, I've always got the proper opening price. Just wondering if it's ever possible that it would go through at the inflated price.
Thanks,
glider


JohnyYuma
57 posts
msg #43663
Ignore JohnyYuma
5/12/2006 10:47:34 AM

Glider
There is a possibility, albeit remote, that your Market Order entered previous night may get filled at a price deterimental to you if your broker or the MM wants to stick it to you
therefore
Although I never enter this type of order, Interactive Brokers has a functionality whereby you can specify the order to be at Limit Marker Open - i.e. you can specify a limt and if the regular open is within that limit, your order will get filled at the Open, otherwise not - this way you are safe (althoug you run the risk of not getting your oder filled if the open is couple of cents away from your limit) - you have to review the trade-off

As far as Pre-Market or After Market orders are concerned, there is a rule (don't know if it SEC/Exchange/or Broker enforced but you can only enter limit orders)

Hope this helps

Thanks


heyen
124 posts
msg #43664
Ignore heyen
5/12/2006 10:50:52 AM

Glider,

please check your trading software. There is somewhere an option for orders Market on Open and Market on Close. Otherwise just place a Market order for regular trading hours only. But illiquid stocks have fluctuous prices on opens. This can be good or bad. I'm seeing spreads of up to $ .15 per share at $2 or $3. Depending on your strategy and time it might be safer to work with Limit orders.

Thomas


heyen
124 posts
msg #43665
Ignore heyen
5/12/2006 10:53:19 AM

Well, JohnyYuma was faster in typing... (and thinking too?)


glider
59 posts
msg #43678
Ignore glider
5/12/2006 4:31:44 PM

Thank you both for your comments.
Speaking of interactive brokers, I just opened an account with them. Waiting for the funds to be accepted. I like the flexibility & choices they offer for trading. I think it may solve this problem.
A really good example of the problem is the following:
Last night I put in a buy on Etrade for a stock which closed at $2.30. The bid was tiny and the ask was over $11. It executed at very close to the open but it's scary. I did a test buy on Ameritrade and the same bid/ask was quoted. The difference between both companies was that Etrade showed the total cost of the trade was the number of shares X close price. Ameritrade's total cost was number of shares X inflated ask price, about five times as much.

Glider


StockFetcher Forums · General Discussion · After hours bid/ask price real?<< >>Post Follow-up

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