Buying after market has closed

[Johno]

Whats the best way to go about this?

If I am expecting a share to rise significantly the next day and put my order in after the market closes (with the option of cancelling that order if the DOW is down), how far above the last close price should you set your "limit" for your buy?

 

[Sunder]

Wouldn't that depend on how high you expect it to open the next day?

As I understand it, it doesn't matter if you put your order in 1 minute after the market closes tonight, or 1 minute before the premarket auction. It's the open price that matters.

If your bid is above the opening price, you get your order fulfilled at the open, if it's below, you miss out.

If you REALLY want the share, and "know" it will keep rising after open, there is no risk at offering double, tripple or even quadruple the previous close, as you will still buy at open.*

*Don't do this with any other products than just fully paid ordinary shares. CFDs don't have a pre-market auction as far as I know... An bid there is a bid.

** As always DYOR, I could be wrong, and I'm not advising you in any capacity.

 

[Johno]

OK perhaps someone could explain to me how a stock closes at say $1.00 and then opens at $1.20? And is there no way to get into that gap betwen $1.00 and $1.20. There must be someon in there!....lol

 

[nomore4s]

lol, TH explained it on the other thread.

There is no transactions between $1.00 and $1.20 - hence the gap.

 

[Sunder]

OK perhaps someone could explain to me how a stock closes at say $1.00 and then opens at $1.20? And is there no way to get into that gap betwen $1.00 and $1.20. There must be someon in there!....lol

I tried to get my head around the algorithms they use to do this, and I ended up tearing the fabric of the universe, where a large portion of my sanity went.

The bottom line is that when the market opens, they calculate the difference between the offers and the bids, and set an opening price where the highest bid is lower than the lowest offer, and all transactions trade at that price. This will usually be a gap from yesterday. You need to stop thinking of trading as a continuity - it really is a series of transactions that are unrelated to the last action. There is nothing stopping me from selling you a share today at $1, then selling someone else a share tomorrow at $1.20, even if you made me an offer tonight of $1.10, which I couldn't take because the market was closed.

 

[Nyden]

OK perhaps someone could explain to me how a stock closes at say $1.00 and then opens at $1.20? And is there no way to get into that gap betwen $1.00 and $1.20. There must be someon in there!....lol

What you seem to want, is some magic risk-free way of buying stock in the hopes of a rally in the US, with the ability to sell before anyone else in the event that it doesn't come through? Where's the laughing smiley ...


No risk, no reward. Simple as that mate. It really is like asking if there's a way to place a bet on Black after the roulette ball's already landed on it

 

[So_Cynical]

is there no way to get into that gap betwen $1.00 and $1.20. There must be someon in there!....lol

Buy the day before at $1.01