Q&A  |  JAN 2009

Q&A by Don Bright

Stocks & Commodities V. 27:01 (42): Q&A by Don Bright OTHER OPENING STRATEGIES? Are there similar strategies to the opening-only strategy for the close of the market each day? Anyone care to share the idea behind them or give me a place to research if you don’t care to share? Thanks. —taclander First off, let’s discuss market mechanics at the end of the trading day. All-day-long orders are submitted to the New York Stock Exchange (Nyse) marked as “market on close” (Moc). These orders will be given the last trade price of the day. These orders to buy or to sell are matched with each other until the 3:40 pm cutoff for this type of order. At 3:40, the Nyse publishes the Moc imbalances, which are the excess buy or sell number of shares with this order designation. If there were one million shares to buy GE market on close and three million shares to sell Moc, there would be a negative two million excess number of shares to sell at the last price of the day. The Nyse will only accept offsetting orders after 3:40 to help cover the excess imbalance. The Nyse will republish the adjusted imbalance number at 3:50. This may bring the number down to one million or so to sell, or even reverse to an excess to buy.

by Don Bright