1. Your Questions About Nasdaq Premarket
Lisa asks…
How are the DOW/NASDAQ premarket futures determined?
How are the premarket quotes for the Dow and Nasdaq determined and what do they mean?
Example:
NASDAQ +0.25 1987.25 7/5 5:46am
Fair Value 1985.11 7/5 5:26am
Difference* +2.14
Dow Jones +7.00 13672.00
Steve Winston answers:
A question asked every day by investors and the financial news media is “Will the market open
up or down today?” The Pre-Market Indicator is an index of trading activity based on pre-market
open prices. The PMI was developed to help gauge pre-market trends leading into the trading
day as a predictor of opening prices.
The PMI is based on stocks being bought and sold during premarket hours and is used as a
gage for market opening. It is primarily based on supply and demand -- volume.
---
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2. Carol asks…
Executing a premarket order on upgrades?
When a stock is upgraded, I am looking to buy into it at premarket hours. To support my
question, I am providing an example of the premarket trade data from the Nasdaq site for
Stock X. There was a previous market close of $22.20, and in premarket, 200 shares were
exchanged at 9:05 for the same price ($22.20) and at 9:28, 150 shares exchanged for $22.75....
My question is, who managed to get the 200 shares at the same price as the market close? And
to get these shares, would I have to bid higher, for example, $22.21? This looks to be the only
way to buy into upgrades and make a profit before the price gets inflated.
I appreciate your help
thanks
-Ryan
sorry, I meant all times in morning hours.. 9:05 am
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3. Steve Winston answers:
Well, that is not legal. You said the order executed at 9:05.
Several mutual funds got into serious trouble a few years ago by using after hours trading.
So I guess I am missing something here. It could have traded on another exchange outside the
United States, London or something like that. And 200 share is not big enough for 2 firms to
have executed a "Cross". Not sure...
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