Dow

[carlosd]

This may sound completly stupid but could somebody explain why if the the Dow jones, s&p etc open at 2-30 (bst) they move up and down on the finspread site even when its closed ?

 

[FetteredChinos]

the Dow Quotes offered by the SB site tend to follow the futures price +/- a fair value, based upon time to expiry, Alan's Greenspan's Body Mass Index, and the number of candles in China.

seriously though, not just outside the NYSE opening hours, but also during them, the SB price of the cash index follows the futures +/- this adjustment, which is why the SB price doesnt always tally with the cash price which your charting system may be telling you.

even before the futures market opens, then the SB companies also manipulate the dow price to tally with the Asian/European markets, and to some extent the FX market.

hope this helps,

im going back to my sandwiches now.

FC

 

[carlosd]

Thank you FC.

So what happens when the market opens do they just ajust the price?

P.S You might have noticed I'm a complete beginner.

 

[TheBramble]

Carlos, as FC says, the SB will constantly adjust the price 'broadly' in line with the underlying market instrument, but it's their call entirely.

There will be times when the SB price appears to bear no real relationship to market action.

You will also note that at those times, you will more often than not, be on the 'wrong' side of the action.

 

[Quercus]

But are you on the "wrong" side of the action or are they just messing with your mind and making you think that you "might " be on the wrong side????

Q

 

[bracke]

The Bramble

Why don't the SB companies just follow the index rather than manipulate the price.
After all if they manipulate it too far that will attract trades on the side that they manipulate the price to.

Regards

bracke

 

[TheBramble]

But are you on the "wrong" side of the action or are they just messing with your mind and making you think that you "might " be on the wrong side????

Q

Yes.

 

[TheBramble]

Why don't the SB companies just follow the index rather than manipulate the price.
After all if they manipulate it too far that will attract trades on the side that they manipulate the price to.

The SB generally takes a view on market direction.

In fact, I used this as a tactical play when I used to use SBs.

If you can get a look at 2 or more SBs on the same instrument you can see where their bias is in relation to the underlying, i.e. toward the top or the bottom on the range if they had a view and middling on the rare occasion when they didn't have the faintest.

Then, when you begin to see them move away with no real movement in the underlying, you get a pretty good indication which way they think it's going to go.

 

[carlosd]

Hi bramble.

At the risk of sounding thick.

How does the above trranslate in english?

 

[TheBramble]

Difficult to give empirical example as it's more of a 'feel'.

Say the underlying (whatever instrument your following) is making it's move - you don't care which direction or if it's just ranging.

You're also shadowing (more than one) SB to see what they're doing with their price.

Although they will very roughly be following the underlying you will notice, if they have a view, they will be 'hugging' one side of the range. So, for instance, they'll be quick to move their price with the index in one direction, but a little slower in the other. You can pick up their bias from this.

Very occasionally you'll get a bonus and see them switch emphatically from either one end to the other or more often, from a middle (haven't got a view) position to emphasis.

Probably not made it much clearer, but I think you can get the gist.

 

[carlosd]

I understand, so if they feel the Dow for instance is going to finish in + territory they open higher and vice versa.

 

[Racer]

You can watch futures on the Dow on www.igindex.co.uk home page or any of the other spread bet home pages. You can see after hours movements on the Dow, in fact I have put bets on/closed bets out on the Dow around 23:00!
Also watch the Dow before and after 07:00..can change a lot at that time.