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| Cramer's recap 1/4/06... playing dirty |
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| Dave Rathbun |
 Posted: Thu Jan 05, 2006 4:45 am Post subject: |
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CFO
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As an example, the market is open now as I type this. Yahoo reports the following quote for eBay:
Last Trade: 44.51
Trade Time: Jan 4
Change: 0.00 (0.00%)
Prev Close: 44.51
Open: N/A
But in real-time it's this:
Last: 45.10 Vol.: 916,884
Change: +0.59 1.33% Tick: Up
Bid: 45.08
So if the trade went through right now you would buy at the previous day's close ($44.51) and could sell about 20 minutes later for a profit ($45.10) just because you know that the stock went up. Instead, you put in your buy and wait for the quotes to catch up.
Limit orders will help, because you can set the price that you want. But going back to the earlier (extreme) example of a $50 stock dropping $1 per minute. If you know (because of real-time quote access) that the stock is currently $30, but delayed quotes say $50, you cannot put in a limit order to sell at $40. It will be too late. You can put in a limit order or $25, and it will sell (at $30) when the order opens.
Suppose you want to put in a "buy" at $20 for a stock currently trading at $25. The order queues up, then 20 minutes later will become active. At that point, every minute (the trading system here checks quotes once a minute) the system will check to see if the price has dropped to (or below) your limit order. If so, your order executes. So limit orders will not allow you to circumvent the 20 minute delay, they will just allow you to specify entry (or exit) points for your stocks so that you don't have to actually visit this site to make your trades.
Benjamin... maybe these last few posts should be split into the trading simulator forum from this topic? |
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| frusnak |
| Posted: Thu Jan 05, 2006 5:10 am Post subject: |
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CFO
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 Wonder why I am getting so many posts lately?  |
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| Benjamin |
| Posted: Thu Jan 05, 2006 5:22 am Post subject: |
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Administrator
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