Barbara wrote:
- quote -

Even in a normal market I think trading at the open is a recipe for
"uncertain pricing." There have been studies of this, there's quite a
bit of volatility in that initial price-discovery phase.

But it's even more so during the date in question. For bank stocks, the
last trading day before 9/22 was probably one of the most volatile in
history...just pull up random tickers and look at the five-day charts
and you'll see what I mean (WFC is a good example - or BAC for that
matter). It would not surprise me if all the news over the weekend led
to some odd order imbalances and volatility at the open 9/22.

I don't know how Scottrade routes its orders, or how they interpret an
order that you place 9PM the prior day, but to me the bigger issue is -
why place at/near-the-open orders at all, when both the market and the
sector volatility are sky-high?

-Tad

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"Barbara" <brstock[at]aol.com> wrote in message
news:da5132f3-5245-4998-9370-f5d2724cbf6c[at]73g2000hsx.googlegroups.com...
- quote -

I checked the one minute data on BigCharts.com for BAC for 09-22-2008. The
first minute saw a range from 35.50 to 36.00 and the second minute from
34.80 to 35.50. Since BAC is NYSE listed, Scottrade was correct to route the
order to the NYSE. You should consider yourself fortunate to have sold at
35.50.

It is a very bad idea for individuals to trade a stock at the open or close
of trading. If you cared about the price you should have used a limit order,
not a market order. It is also important to note that 50 shares is an odd
lot and is handled differently than a round lot. In the future you should
ask your questions first and do the trade second.

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Barbara wrote:
- quote -

Even in a normal market I think trading at the open is a recipe for
"uncertain pricing." There have been studies of this, there's quite a
bit of volatility in that initial price-discovery phase.

But it's even more so during the date in question. For bank stocks, the
last trading day before 9/22 was probably one of the most volatile in
history...just pull up random tickers and look at the five-day charts
and you'll see what I mean (WFC is a good example - or BAC for that
matter). It would not surprise me if all the news over the weekend led
to some odd order imbalances and volatility at the open 9/22.

I don't know how Scottrade routes its orders, or how they interpret an
order that you place 9PM the prior day, but to me the bigger issue is -
why place at/near-the-open orders at all, when both the market and the
sector volatility are sky-high?

-Tad

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to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
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"Barbara" <brstock[at]aol.com> wrote
Re a stock order placed Sunday not executing at or even very
near Monday's opening price
- quote -

I expect Scottrade is being about as truthful as it can
without giving a complicated explanation. Fidelity orders
also see this problem. In short, one should not count on
getting the opening price. From my reading, I would call
"opening price" a phantom price relative to the other prices
published for a stock throughout the trading day. Opening
price is based far more in speculation about how buyers and
sellers value a stock.

A little dated but I think mostly still valid:
http://invest-faq.com/cbc/trade-open-price.html

http://www.fool.com/ddow/1999/ddow990608.htm

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Have a problem with an execution with Scottrade? Example: I entered at
about 9:00 PM on 9-21-08 (Sunday) an order to sell 50 shares of BAC
(Bank of America) for a friend's account that I have a limited trading
authorization for on 9-22-08 or Monday.

The stock shows on AOL and even on Scottrade's own Site, that it
opened at $35.97 but the execution was for $35.50. The stock was ex-
dividend on 9-3-08 so that was not it.

I called Scottrade and their explanation was that it opened on NASDAQ
at $35.97 and on the NYSE at $35.50. I find it hard to believe there
could be so much disparity between the two opening prices for such an
actively trade stock. Also, I believe Scottrade is in the fiduciary
capacity to get my friend the best price possible and they should have
some computer program, even if the there was this much disparity, that
drew it out before the opening so it could be individually handled.

Does someone know what, to verify what Scottrade is saying, what BAC
opened for on 9-22-08 on the NYSE?

What do you say?

Barbara

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