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Nothing shady. Stocks trade aftermarket on Instinet, which is a privately
operated computer only trading entity. Just like if I wanted to sell you
some stock at an offer price and you accepted it. Bonds, currencies, and
the S&P trade on Globex almost 24 hours a day. Most all major world
exchanges have after hour trading. As to your friends stop order. A stop
order becomes a market order when the security trades at or thru the stop
price. Therefore, when the market opened gap down, your friends order was
treated as a market order and filled at the price prevalent at the time.
This can happen any time a security opens gap down from the previous
regular session market close. If your friend did not choose to sell at the
market open, (CNBC had widely announced the earnings disappointment) he
could have cancelled the stop BEFORE the market opened. I have been there
several times. Treat it as tuition.
Al Taglavore
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> From: diamond <diamond@xxxxxxxxxxxx>
> To: MetaStock-list <metastock-list@xxxxxxxxxxxxx>
> Subject: After Market Closes Trading
> Date: Wednesday, February 04, 1998 9:47 AM
>
> A friend of mine bought 2000 shares of IOM at $12.25. He put in a stop
> loss. Because of a 2 cent dividend loss, the stock dropped to about $8.00
> in one day and he lost about $8000. The thing I don't understand, is that
> it was traded after hours. My friends stop-loss was useless.
>
> Can someone verity this? Can stocks be traded after wall street has
closed
> for the day? Is the stop-loss only good during market open hours?
>
> I can't seem to find anyone in my area who knows about after hours
> trading.* I thought all trading stopped after the market closed. It does
> seem a bit shady if it is true. It gives someone somewhere a big
advantage.
>
> Regards
> Zane Koir
> Abilene, Texas
> *
>
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