FTSE Gap Plays

[NWE]

Hi All,

This is my first post.
If I was looking at Day trading the FTSE 100 and using the GAP Play strategy, Price attempts to close the gap between End Of Day yesterday and Open of Today.

What would be considered the End of Day time. 4:30PM or actual market close 9:30PM?
When do commercial traders finish for the day?

Here in Australia we have two different sessions with a reasonable break between. Day Session - 9:50AM..4:30PM and Night Session 5:10PM..8:00AM.

Neil.

 

[barjon]

neil

you probably know that can't trade ftse directly since it is an index that reflects what's happend to the 100 constituents during market hours 8am - 4.30 pm - with 10min pre and post auction periods.

ftse futures market is 8am - 9pm.

so if you're going to try to trade ftse it'll be by some proxy provider (spread betting for example) and a lot of those quote pretty much 24 hours.

As for gaps the official LSE rule for ftse is that today's open = yesterday's close (which is unrealistic since it takes no account of the pre-market auction period) and a lot of data providers follow that rule so their charts show no gap. Other providers take a more realistic approach, thus their charts show gaps, but can have slightly different ways of doing so.

In any event my opinion is that you need to be careful of ftse gaps because, in general, ftse does not have a mind of its own but is tied to its DOW big brother. Thus, what happens after an opening ftse gap is hugely dependent on what's been happening to DOW and Dow futures overnight.

good trading

jon

 

[NWE]

Hi Jon,
Thanks for the reply.
I am looking to trade the FTSE Futures.
So does the FTSE follow the DOW more than the S&P500?

Neil.

 

[Mr. G]

jon said:
"As for gaps the official LSE rule for ftse is that today's open = yesterday's close (which is unrealistic since it takes no account of the pre-market auction period) and a lot of data providers follow that rule so their charts show no gap. Other providers take a more realistic approach, thus their charts show gaps, but can have slightly different ways of doing so".

The FT (paper and website) publishes hourly indicies data with the first plot being 08.03 so you could always plot the open manaually and exclude the first 3 mins. That would give you some nice gaps......