How about premarket and aftermarket trading? I like doing that a lot. For instance, today, I completed a roundtrip in the premarket on TSCM for 3 points before the market opened. I like to short in the premarket a lot too.
Same thing with the aftermarket. I was holding a quarter position on Dell through earnings. When I saw the aftermarket bid drop two points, I hit it immediately and exited, saving myself 2 plus on the downside the next day.
But there are pitfalls for sure in premarket trading. For instance, this morning, RMBS had a nice upgrade from Morgan Stanley with an incendiary upside target. Immediately, people were buying in the premarket for 81 plus. The stock never traded at that level during the day so they all got hosed. Sometimes, you can't buy the news stories in the premarket. I figure half the time, if you see INCA on the bid well up, that's about the high you're going to see for the day because they're selling it lower on the other side to buyers sucked in by the high bid.
I also gauge whether to play premarket by the involvement of other daytraders; i.e., ISLD or ARCA bids. I'm a lot more confident if I see them.
Anyone, your experiences with this? |
