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Strategies & Market Trends : The Final Frontier - Online Remote Trading

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To: Lynn who wrote (3902)	4/26/1998 3:33:00 PM
From: steve goldman	of 12617

Last post before my wife has my head--- Gaps refer to stocks that open up or down from their previous evenings close. ie....stock ABCD close at 10 on friday. News comes or market becomes bullishes on monday monring and stock opens at 10 1/2. Very first print is up 1/2, gapping up from close at 10. Some traders buy/sell stocks on the close based on momentum and potential to simply make money on the gaps. Very risk but stocks often gap open since sentiment rarely is exactly the same the following market open. Taking stocks home and trying to capitalize on gaps can be dangerous as they can often gap agaisnt you. ie. Oxford Health closed at 68?ish and gapped down to 24ish after the news...thats not a gap that some day trader with 1000 shares/100% equity , can afford. You cant control or hedge risk overnight. Anything can come. You make 1,2,3,4 winners and get cocky and then take home something and give it all back with a disaster da.jour... gaps- a change in the opening price of a stock from its previous close. Determined by equilibrium of buyers to sellers whether it be made by the specialist on the NYSE or market makers on NASDAQ. Regards, Steve

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