Buying at the opening price

[datasum]

I tried to buy into Mesoblast Ltd at 9.30am this morning by putting in a rising buy conditional order for $2.20 seeing that it closed yesterday at $1.96. Needless to say it opened at $2.47 and I missed the (HUGE) boat...What should I have done to get in at the opening price - put in a bid at $3.00? Or put in a bid at "market"?

 

[tech/a]

You could have bought it at around open in the first hr.

you could put in a very high I’d
Or at market a second or so after open
Or watch then buy a couple of cents even 10 won’t matter unless
Your day trading

 

[datasum]

Thanks for the reply. Yes I was day trading. I only started trading 2 weeks ago and I've seen the opening price a little above previous days close but never such a jump as today. Yes in hindsight I could also have bought later but didn't know it would have another rise or even two! So if I put in a bid at market would I usually get it for close to opening price?

 

[tech/a]

Yep

 

[datasum]

Thank you!

 

[qldfrog]

Thank you!

at market a second or so after open

As @tech/a noted above, market needs to be open to buy at market
Timing is of the essence
You could have done a buy at $3 before the open BUT if too high this will get rejected during the initial open price negotiation
No easy answer if you were not available at open time
Another way i have not tried before could be a string of conditional buy
If more than 2.5 buy at 2.55
If more than 3 buy at 3.1 etc
Within a time range between 10am and 11am let's say
But you might end up with more than you wish...
Has anyone used that last method?

 

[datasum]

Interesting idea - I didn't think of doing 2 rising buy conditional orders at different prices and then trying to cancel the higher one if the lower one gets the buy. Is that what you mean? I also didn't know a too high bid before opening may get rejected. How does this happen?

 

[qldfrog]

Interesting idea - I didn't think of doing 2 rising buy conditional orders at different prices and then trying to cancel the higher one if the lower one gets the buy. Is that what you mean? I also didn't know a too high bid before opening may get rejected. How does this happen?

Conditional buy, yes that is the idea ..never tried but if I would be unable to access my platform at open, I would give it a try
Bid rejected: it is an issue indeed
There is a "negotiation" phase just before the open (30 min or so) to determine the opening price and bids too far are rejected, I do not have the formula they use but as my weekly systems buy at Monday open, I put a buy bid order at a few % above Friday close It sometimes get rejected as " too far from the predetermined expected open" and i have to rush to address the issue even if ultimately, the open might end up being at what what my initial target was...Especially difficult to be right in the current volatile environment.
FYI, I also had a case recently where there was a low ball buyer at a price far from the last Close; i was ready to offload and was unable to give my sell order as it was rejected and at market was still too high with no buyer.This happens for illiquid stocks

 

[Sharkman]

i'm not a day trader, so i'm not at all knowledgeable in this area, this is more out of curiosity - but don't most brokers show an indicative price when the market is in pre-open? my understanding was that this is the level pre-open orders would be executed at if the opening auction rules were applied to the pre-open bids and offers currently present? is it possible to watch that indicative price then, if one really wanted to buy on the open, put in a bid just above that indicative level a few seconds before the open? or is that indicative price just really inaccurate in practice?

 

[frugal.rock]

i'm not a day trader, so i'm not at all knowledgeable in this area, this is more out of curiosity - but don't most brokers show an indicative price when the market is in pre-open? my understanding was that this is the level pre-open orders would be executed at if the opening auction rules were applied to the pre-open bids and offers currently present? is it possible to watch that indicative price then, if one really wanted to buy on the open, put in a bid just above that indicative level a few seconds before the open? or is that indicative price just really inaccurate in practice?

The indicative price is accurate at a single point in time.
Just like you suggested, a lot of people will put there orders in just before open, but with the exact opening time having a 30 second spread, there's a reasonable time for rapid indicative price changes!

 

[Sdajii]

I wouldn't be day trading unless I was watching to market very closely. Certainly wouldn't day trade by putting in an order at 9.30AM then wandering off until well after open, hoping to sell later in the day.

You could put in a very high offer as long as it doesn't get rejected (as QLDfrog said), but this is a dangerous move when day trading.

A basic strategy would be to wait until shortly before open and place your order at slightly above the predicted opening price, noting that volatile stocks can move very quickly, so the potential opening price may be difficult to predict, in some cases even just seconds before the actual open. Time, experience and familiarity with your specific stock will tell you what it likely to happen.

Good luck! It's a very interesting time to have jumped into trading for the first time! If you're playing with a lot of money on speculative stocks in a market like this you're likely to become very wealthy or suddenly poor (I'd honestly expect the latter at this point, I personally think this bounced dead cat is about to fall off the next cliff). If you're playing with a relatively small amount of money you're doing it at a time which is more exciting than usual and could be a lot of fun.

 

[datasum]

Thanks for the tips re bidding just above the 'predicted opening price'. I've seen this figure but not understood what it means as shares were often not opening at the stated price. No I am not walking away from the computer at all, just using the conditional order to only buy if the stock goes up and not if it goes down on opening. I'm not investing large amounts at the moment just relatively smaller amounts until I gain a bit of confidence in my decisions. Sdajii, what is the danger in putting in a very high bid - just the risk of missing out?

 

[Sdajii]

Thanks for the tips re bidding just above the 'predicted opening price'. I've seen this figure but not understood what it means as shares were often not opening at the stated price. No I am not walking away from the computer at all, just using the conditional order to only buy if the stock goes up and not if it goes down on opening. I'm not investing large amounts at the moment just relatively smaller amounts until I gain a bit of confidence in my decisions. Sdajii, what is the danger in putting in a very high bid - just the risk of missing out?

Well, this becomes dangerous if you aren't watching. For example, the indicative opening price is $2, you put in a bid for $2.50 to make sure your order goes through. Generally you would expect to get your parcel filled at around $2. However, you may have problems. If liquidity is low and sellers pull out, you may end up having your order go through at close to $2.50, only for it to quickly resume trading around $2.

Alternatively, it could be even worse. Between leaving your order for $2.50 and the market opening, the company many release some bad news causing the price to tumble to, say, $1.50. Your order will probably go through at the low price, but if liquidity is low, you could potentially buy for $2.50 only for the market to crash to $1.50 on the very next trade, possibly just one or two seconds later. Generally this wouldn't happen and you would need a combination of liquidity and bad news and timing working against you to have something this extreme, but it's certainly possible to have a milder version of this, and very easy to lose one or two pips on most stocks most days if you're not careful.

 

[tech/a]

I trade lots of very short term trades. Dax Futures

I never buy the open but that's me.
(often fade it )

I wait for clear momentum then a watch for momentum to stall.
Entry and Exit right there. (Lot more to it than that but that's
the basic Premise.)

I can and have gone many sessions (Around an Hr) without a trade.

 

[InsvestoBoy]

My approach if I want to buy the open is to calculate enter a buy stop at a fraction of ATR, e.g 0.2*ATR.

So if I want to buy, I don't buy, I will wait for the price to trade a tick above the open price + 0.2*ATR, then buy at market.

That way the price has to prove itself, if it trades down straight away I won't be in it.

 

[qldfrog]

i'm not a day trader, so i'm not at all knowledgeable in this area, this is more out of curiosity - but don't most brokers show an indicative price when the market is in pre-open? my understanding was that this is the level pre-open orders would be executed at if the opening auction rules were applied to the pre-open bids and offers currently present? is it possible to watch that indicative price then, if one really wanted to buy on the open, put in a bid just above that indicative level a few seconds before the open? or is that indicative price just really inaccurate in practice?

yes and you will get it done but that assumes you are on your screen at that time and available, with no connection issue, etc

 

[barney]

If you're playing with a lot of money on speculative stocks in a market like this you're likely to become very wealthy or suddenly poor (I'd honestly expect the latter at this point

Good advice … because that is exactly what cost me 5-6 years of my life in losses (and a lot of depression) many years back when I first started trading and thought "how easy is this"

Howdy @datasum ... MSB announced their news just before the open yesterday.

The real gains on Specs/minis (in my view) are realised by researching the company and getting in long before the "news" eventually hits.

If you try to chase spec/small cap prices based on daily news results you will need to be very nimble and often have nerves of steel (when things don't go to plan … and that will happen!!)

If you are relying on the news to be the catalyst to enter a trade, you are likely TOO late.

Some day traders get lucky no doubt, but it is not for the feint hearted nor the inexperienced

Cheers.

 

[barney]

I'm not investing large amounts at the moment just relatively smaller amounts until I gain a bit of confidence in my decisions.

That is an important decision so well done on that.

Its all a learning process and not risking too much is a good place to start.

Just don't get cocky and become a punter if you have a few wins!!

 

[datasum]

Hi Barney. I've been watching announcements and then studying what effect these have on the company's immediate share price and have noticed somtimes there seems to be a direct correlation and sometimes not, so I get that there is more at play here. Finding out more about the company history sounds like a good idea - thanks. InsvestoBoy and tech/a are you saying you wait for the price to start rising a calculated amount and then you bid at market? I've tried bidding at market and both times I ended up paying more than I planned to. That's why I was trying out Conditional Orders like rising buys where its done for you.

 

[noirua]

I trade in 6 different market places and have done quite well over the years. Each market is completely different though some things are the same. On buying a share or taking a position I write down how long I intend to hold and keep to it. No switching from an intended day trade to 'maybe hold on for another day or so'. Three times out of four I've found that to be a successful way to go. Buying at the start of trading is wrong too many times as experienced and well setup traders are always on to it - maybe you have four or more screens and pay thousands of dollars a year on various products and have tie-ins with other top notch traders, then maybe you are right to do go that way.