|
PureBytes Links
Trading Reference Links
|
The markets often do take a couple of minutes to find value on the open for
just the reasons you ask about. Just about all markets either have a cash,
globex, or related overseas market that trades overnight and gives some idea
of the opening level. The locals in the pit use this to give opening
"calls" before the market opens. There are often a few "leading" locals or
brokers whom others follow, especially in option. The smaller locals will
wait until they here a market from the bigger locals and then they just
follow along. The locals and brokers talk just before the market is
beginning to open to get a better idea where it will be, but in the end it
is just a feel that a good broker develops in sensing what orders to work
and what prices to try to fill the market orders at.
Eric
Conrad Bowers wrote:
> I am curious about how the opening is "decided on". Would be interested
> in present/past floor brokers drawing a picture for me:
>
> You are standing there before the market opens with some limit orders
> and some market orders. I assume the market orders get the ball
> rolling, but if you only had limit orders you would bid/ask based on
> them? My question is: how do you know where to start bidding and
> asking, particularly if everybody has market orders. based on previous
> close? overnight action?
>
> A related perhaps more practical question for the off-the-floor trader.
> Where do the opening calls come from? Would they be different from
> different sources? To the extent it can be generalized, are they
> reliable?
>
> Conrad Bowers
|