Stock's Gap - What is it and Why it Happens?

The reason for this phenomenon is the order imbalance. More often than not, we see stock gaps up or down on the chart. A gap on the chart refer to a 'hole' in the price action from one day to the next. On the upside, a gap-up starts with a significant increase in price at the opening bell. Throughout the trading day, price of the stock stays relatively close to open price or go higher and finish the day that way.

The same is applied to the a gap-down when the price action reflects on the downside. Market is trading hours before and after its opening and closing. The time period varies from exchange to exchange. However, what could happen in those time are pretty much the same. Company could announce earning or bankruptcy. Unexpected news could break-out that will influence the official trading hours.

Let's say company A announces an unexpectedly massive earning in the pre-trading hour. There is likely to have a large wave of buying order coming in the exchange. Since it is completely out of the blue, it suddenly creates an order imbalance. The buys outweighs the sells orders.

In order to meet the demand, the market maker will start to raise the price of the stock gradually. They will keep doing this until the price is attractive enough for someone to sell his stocks. Earning is just one example. It could be also because people wants the stock so badly after the market close for some reasons. A flood of buy order comes in in the after-hour trading and the market-makers will have take action on it.

The same holds true to a gap-down. On this side of the coin, it could be a bad news coming out. Bad earning or unexpected event took place like the Sep-11th. People go into panic mood and start dumping their stocks creating order imbalance. The market maker then have to lower the stock price to the point it is cheap enough for somebody to want the stock.

It is said that to be able to push the price up or down in the pre-hour trading session, the market makers have to use some of their own money. At some points in time, they will have to take down or push up the price of the stock to bridge the gap and cover their own positions. It is unverified and official but the point is: Gaps get filled.

My name is Richard M Le. I am passionate about Trading & Investing and sharing with you what I know in the stock options market. If you want to learn more about Online Options Trading, please visit my site at: http://ioptionstrading.net

How to Watch the Stock Market

I love investing, and I love just about everything about the stock market in particular. But I find that many people get confused and don't really know what to watch for when it comes to paying attention to the stock market.

Sure, if you flip on the news in the evening they will probably tell you what the Dow Jones Industrial Average did for the day, whether it was up or down, but that doesn't really give you the overall view of how the market is doing on any given day.

In this article I want to spend a few minutes discussing several other things you should keep your eye on besides the Dow Jones index that will give you a broader picture of exactly what the market has been up to on any given day.

So the first thing to watch besides the DOW is the S&P 500. It is an index fund made up of 500 of the best stocks as chosen by the good folks over at Standard and Poors. When people say the "Stock Market" many times they are referring to the S&P 500. It's a fairly good indicator of what the market is doing on the whole. Also, most evening news shows and radio news spots will mention this index each night.

Next you should pay attention to the TRIN, which is the trading index, because it attempts to measure the volume of trading that was done on any given day. If the TRIN goes from above 1.20 to below.70 during any day, that usually means that the stock market has turned Bullish. On the other hand, if the TRIN goes from below.70 up to 1.2 then the market has turned Bearish. A TRIN of 1.0 means that the market was mostly steady throughout the day.

Next you may want to watch the activity on the Over-The-Counter market, which is a market of thinly traded very small companies. If it outpaces the general stock market, that might be a sign of a BULL market. Likewise if its volume is much less than the broad market, that might indicate a Bear market.

Also you should keep an eye out on the old Quotron change because it measures the daily percent change for all the stocks on the New York Stock Exchange with it's QCHA index and all shares on the American Stock Exchange with its QACH index. Many mutual funds pay especial attention to this index, even more so than they do to the Dow Jones index.

And of course you are going to want to keep an eye or two on the general financial news of the day. There are many ways to do this, but my favorite is to read both the Wall Street Journal and the Financial Times Newspapers every day. The Financial Times is a newspaper out of London, but they deliver daily to most major cities in America and daily or every other day via postal mail outside of most major cities.

Both these papers are excellent sources for staying up to date in all the financial news of the day. I'm sure with the advent of the Internet there are even better ways to keep current on financial news, but for me I like my daily routine of reading the old fashioned newspapers!

So there you have it, several things to watch each day to keep abreast of the stock market and stay informed to protect your investments.

Jason Markum has been writing articles online for over thirteen years. When not writing about investing, Jason runs a cr123a lithium battery web site where he reviews rechargeable D batteries for all your household needs.

Online Stock Trading - Extended Trading Hours Secrets - How To Trade After Market Close

A friend of mine recently asked my how it is possible that some stock prices still fluctuate although the stock exchange has been closed already. The answer lies in extended trading hours.

Extended trading hours are much different than the normal trading hours. There are other rules and if you want to participate you must know them. First of all, just because the regular trading hours are over it does not mean that there can be no other trades.

But where do these trades take place? Extended trading hours are usually for institutional traders but you can place an order as well as long as your broker supports it. Most modern online brokers do nowadays.

You can often place trades and get executed until 7pm or 8pm EST. But it all depends on the volume and liquidity at this point. One thing is important. There are other rules and the liquidity is usually much lower than during regular trading hours.

If your broker takes orders you will have to place limit orders. Chances are high that you only get a partial fill or not filled at all. Or you get an odd lot. This means higher risk that you probably can not exit the trade when you want.

Another problem with after hours trading is the wider spreads. Because of the lower liquidity the spreads begin to widen. This means higher costs and higher risks for you.

Since private investors are rarely participating, you will compete with professional traders. This can also mean a higher risk to you.

Why would someone want to trade after-hours? There are good opportunities after hours as long as you know what you do. Companies do report earnings or important news after hours for example. This gives you a chance to react on the news and get in or out of a stock while other investors are still waiting for the next trading day to begin. Many traders enter after hours and exit the next day before the market opens. They made a profit before others even start trading.

Highly Recommended Reading:

Online Stock Trading

Understanding The Stock Market

David A. Sorenger is an expert author on stock market related topics. His articles about stock trading, online stock brokers, stock options and penny stocks have been published on numerous web sites, forums, blogs and e-zines all over the Internet.

Athens Stock Exchange and It's European Positioning

Before 2007, the ATHEX was located in Psiris, Sofocleous Street, nearly on the city of Athens. Because of this, the stock exchange and Sofocleous Street became recognised as one. Now it's 110 Athinon Street also called Kavalas St.

A stock exchange doesn't possess shares. Instead, it joins buyers to sellers. Every public stock barters on a stock exchange. Although you'll probably trade stocks directly via a stock broker, it is key to understand the union with exchanges and businesses and the ways in which the necessities of various exchanges render protection to investors.

The Athens Exchange Index represents two indices. The ATHEX Main Market Composite Index is a comprehensive index which contains the 60 most highly capitalized company shares of the Athens market and indicates market trends. The ATHEX Main Market Composite Total Return Index computes the total performance of their Composite Index.

In modern-day times, stock exchanges trade throughout the world, and they have become extremely regulated institutions. Investors intending to purchase and unload stock shares are required to do so indirectly through a stock broker, who pays to own a position at the stock exchange marketplace. Organizations with stock shares traded on the exchange are are viewed as 'listed' and and need to conform to specified criteria, which varies across exchanges. Most market exchanges started as floor exchange markets, whereby business traders made deals in-person. The biggest exchange universally, the New York Exchange, still functions this way, but most of the international exchanges have now become fully electronic.

The Athens Exchange trading hours are determined between 1000am - 1630pm with a 30 min. pre-opening period and a fifteen minutes post closing time period. ASE members, generally speaking broker firms which have acquired the nod from the Directorate of the ASE, are able to deal in the stock exchange market. All transactions are in monetary currency, and are traded on the exchanges.

Our account of stock exchanges is dated back to twelfth century France, when the first brokerages are thought to have devised, credit trade and governance securities. Informal stock market places survived throughout Europe in the 17th century, where brokers would get together out-of-doors or in coffee establishments to fix trade. The Amsterdam Exchange created in 1602 became the first ever authoritative stock exchange market once it begun dealing with shares of the Dutch East India Company. Those dealings were the 1st company shares ever released.

With Greece being a fully fledged member of the E.U., with the introduction of the Euro currency and with agreements made by the Greek parliament in 2007, the Athens Exchange is tightly tied into the European stock market. It's the primary stock market in Greece dealing stocks and bond certificates via a fully computerized system called O.A.S.I.S.. Computed screened based futures and options trading is conducted on indices, options and futures, The Euro Dollar future exchange rate plus the ten year Hellenic Republic Bond done through the Athens Derivatives marketplace.

To interpret the European stock market, it is plausibly less complicated to look at the Athens Exchange and other stock markets as auction establishments. Only then will you appreciate the inner workings of the stock exchange markets.