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Strategies & Market Trends : Momentum Daytrading - Tricks of the Trade -- Ignore unavailable to you. Want to Upgrade?

To: paideia who wrote (1035)	5/24/1998 11:38:00 PM
From: Darren	Read Replies (2) \| Respond to of 2120

The question is this: What is the EXACT, SPECIFIC process by which the opening morning price is determined on a NASDAQ stock that gaps significantly up or down? Stocks actually trade until 6:00p the night of, and starting at 9:00a the next morning through Instinet (Nasdaq), a third-party closed market system. So, the stock price you see at open is just basically what has happened in closed trading between the close and the open. You can get into that action through a) an Instinet broker, or b) a broker that uses SelectNet or the Island ECN. One of the ironies of this is that such a closed system creates "over-buying/selling" and you get reactions at market open that are the opposite of what you would expect. Hence, a stock losing value all night long would actually move up after open on overselling, and then continue it's trek downward through the open price and to whatever price it settles on. This is not always true, but it is one of the most common repeating patterns in the stock market...