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I don't agree with you, If I have a stop in the market, and the market
opens above the stop, then the open would trigger my stop and I should get
the open price, not cancelled. If the market is trading above my stop when I
enter it then I might as well be entering a market order, but the stop
should not be cancelled. The market has traded through my stop. So what if
it happens to be on the open? That is what opening runs are all about.
People throw stops in from the night before, and they all get hit at once
on a higher open. A buy stop is a buy stop.
David Elden
-----Original Message-----
From: Rick Francis [mailto:rcfran@xxxxxxxxxxxxx]
Sent: Saturday, August 14, 1999 10:19 AM
To: omega-list@xxxxxxxxxx
Subject: RE: Buy stops and after-hours markets
At 11:38 AM 8/13/99 -0400, Brad Rylander wrote:
>I'm a position trader, using Ameritrade. I frequently place my orders
>in the early morning with a buy stop a bit above the current close.
>
>Recently I've had several orders cancelled. Ameritrade has told me
that
>buy stops must be placed above the current price and the price has
moved
>above my stop before the 9:30 AM opening..
>
>Is there any way around this problem other than watching the open and
>deceiding from there?
By definition, Ameritrade is correct. If you are placing a Buy stop on
the open at say $25.00 and the market opens above this level at $25.50,
for example, then you would receive an unable or a cancel since a Buy
Stop does have to be above the current
market price to be valid.
Apparently Ameritrade is using, as most all brokers do, the RTH's, open
and close to determine the validity of your stop. To avoid this
problem, you need to be aware of where the stock is currently trading
on InstiNet before placing your order.
The only way around this is to switch to a firm other than the standard
retail discount brokers in order to trade after hours. An example would
be: http://www.tigerinvestment.com/ .
Good Luck,
Rick
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