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

To: Darren who wrote (1036)	5/24/1998 11:58:00 PM
From: paideia	Read Replies (1) \| Respond to of 2120

Darren, thanks for your response. I still don't get it, though. For example, where are all the afterhours and premarket Instinet, ECN or Selectnet sales displayed? Whenever I check afterhours and premarket TOS, usually there are only a few thousand shares that show up. Are there significant volumes of shares that exchange hands somewhere that never show up in daily published reports, e.g. between MMs?

To: Darren who wrote (1036)	5/25/1998 12:07:00 AM
From: Robert Graham	Read Replies (1) \| Respond to of 2120

I do not find this to be correct. In many cases that I have witnessed, Instinet trades can depart significantly from the closing price of the previous day and the opening price of the following day. This is because Instinet is a relatively illiquid market that is driven by negotiation of price between individuals using the system. Instinent is used by the MMs and the institutions to move around large to very large blocks of shares. It is my understanding that the "funny" prices we see on Instinet in after hours trading is "Joe Public" playing trades on the system in lots of hundreds of shares, which Instinet is a relatively illiquid market for this type of activity. So there will be spurious prints on this system as a result. The opening price of the stock on NASDAQ depends on the demand of stock on NASDAQ, not on Instinet or the London Exchange or anything else for that matter. The MM evaluates the current situation of a stock by recent news, demand discovered in the morning, if one sided then his ability to find others to take the other side of the waiting trades, and so forth. Perhaps the Instinet activity will weigh in as a consideration here. Theoretically, the opening price is an attempt to match up current supply with current demand at the open of the day's trading. Realistically speaking where it concerns NASDAQ stocks, I think the open price at times can be determined as much by the current needs of the MM as the current needs of the market with respect to the MM purpose of maintaining two sided liquidity in the market. Note that I am not specifying the price that this liquidity is available at. Comments and feedback welcome. Bob Graham