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Thread #1,000,000 about the pre-open!

Discussion in 'Beginner's Lounge' started by ChomChom, Jul 8, 2008.

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  1. pixel

    pixel DIY Trader

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    simple answer: No.
    While a stock is in pre-open, you cannot place an order "at market"; you HAVE TO specify a limit.

    If you have a live data service that includes market depth (i.e. bids and offers), there will be an "Indicative Open Price" or IAP on display. So you don't even have to sum it all up yourself - which is quite handy because every new bid or offer will of course change the situation.
    The good news is, you can bid any amount. For example, if the iap is $1 and you're desperate to get filled, you can bid x shares for $2, just to make sure you do get your fill.
    The bad news is, you may end up getting the shares at, say, $1.10, only to find the price drop back to $1.01.
     
  2. burglar

    burglar

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    You need to be aware that sellers can drop out and leave you hanging out to dry.
    i.e. leave you paying the full $2
    Experience will tell you the likelihood of this happening.
    Best to not cross swords in the pre-open until you understand how it works.
     
  3. Ridgydidge

    Ridgydidge

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    Thanks guys, that has definately cleared the situation up for me:xyxthumbs
     
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