Trading nevrs stops?

[Pound foolish]

I had a thought, it may sound a bit daft, I may be way off with this. :smart:

I like Xstrata. They are nice and volotile, you can buy low and sell high quite well. The price movements can be as much as 5 to 8% in one day's trading.

My question is: This is an international traded stock. So when the London market closes, do shares continue to trade in UK listed sharers in USA and then in the Far East after USA closes?

This could have the effect of the London opening price being way of what it closed at the day before the very moment it opens.

I have seen several well known stocks crash on opening before recovering durng the rest of the day.

If I am right, then UK traders can never sleep, as they need to know what is going on in other markets around the clock to take advantage of the latest trend.

 

[timsk]

Hi P_F,
Take a look at their website - most big companies will have a section entitled 'Investor Relations' or similar. Somewhere there will be info' detailing which exchanges the stock is listed on. However, even if it's not listed on any exchange other than the LSE, that won't prevent the overnight gaps. These can occur - and do occur - on most (all) stocks (and other instruments too), even if they're only listed on one exchange. This is because the share price reflects geo-political events , as well as overnight news that might affect the share price. For example, the LSE closes at 4.30pm and, on the main evening news at 10.00, it's announced that the C.E.O. of Xtrata has died suddenly in a tragic accident. The next day, the share price must reflect this news because, if it didn't and it opened at the same price it closed at the day before, traders would short it to death. They still might, but the opening price will reflect the news and some traders / investors will take the opposing view that C.E.O.'s are two a penny and replaceable - and snap up what they perceive to be (temporarily) cheap shares.
HTH.
Tim.

 

[Pound foolish]

Are you saying that news can affect an opening share price, without any shares actually being traded by anyone?

 

[timsk]

Are you saying that news can affect an opening share price, without any shares actually being traded by anyone?

Yes, that's correct. There is a caveat in that I've never traded U.K. equities , so someone may well have some information that I don't know about the market here. However, this certainly applies to the U.S. Keep in mind that there is pre-market trading in the U.S. so, trades are going through outside of 'normal' market hours. There, the market makers and specialists control the stocks, so they can widen the spreads and ensure that the bid / offer reflects all the news relevant to the stock. Basically, if all instruments opened and closed at the same price, it would be a doddle to make money. So, going back to your point in your OP about not being able to sleep at night - this is one of the strongest arguments in favour of day trading. Most so called 'experts' will say that day trading is the most high risk form of trading there is. I think the opposite. Time and risk are correlated, so the longer you're in the market, the more risk you're exposed to. It's a slightly different kettle of fish for LTBH investors, as they (normally) factor in sharp movements in the short to medium term.
Tim.