Understanding what the heck is going on before the stock market opening hours...

JPPoulin

Newbie
1 0
Hello awesome stock trading gurus!

I had a very odd experience while observing the opening behavior of five stocks before and during the opening of today's US equity stock markets.

Knowing that the recent cancellation of the Mexican tariffs would probably give a nice bumps to company that would have been seriously harmed by them, I put my full attention this morning to the behavior of the following five stocks: SWKS, STZ, KSU, GM, LII.

While my underlying theory was correct (all stocks jumped up within minutes of market open and managed an average gain 2.2% today), nearly all the gains were absorbed in the pre-trading hours, presumably by Wall Street bots that ruined it for everyone.

The biggest gainer was SWKS (Skyworks electronics) which experienced a nice 4.2% increase in a day. However if you look at the stock a 5-day view of the stock you will notice in the morning of June 10th that the stock jumped almost two percent *without any regular investor being able to do anything about it.* . (By the time I could react at 9h30 am all prices had gone way up)

Fortunately I was reasonably protected given sent all five stocks a limit order but I still lost an opportunity to make some revenue... I really feel for people who gave market orders on these stocks this morning as they totally overpaid for them without having any information that this could happen. (Golden rule: *Never* fill in a market order before market opens!!)

I would understand if this were an isolated incident that would happen to one of my stocks of interest... but all five in one morning??

Clearly the people that have access to extended trading hours have an unfair advantage! Three questions:
1. To the best of your understanding... what the heck is going on in the extended trading hours??
2. How does one protect themselves against this unfair trading behavior?
3. Do you recommend trading in extended hours? (And if so what is the most effective way to do it?)

Thank you for sharing your hard-earned experiences with this group!

Jean-Pierre
 

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