We are pushing hard to release functionality to make our software stand apart from others in the Idea Generation Technology (IGT) and Algorithmic Monitoring (AM) space. The recently concluded meetings this week with clients in NY and customers at the Traders Expo generated plenty of new ideas.

One of them we just released is called, “Large Spread“. Click on the link and it will take you to the growing section of our alerts that deal with internal market dynamics.

Definition
“Large Spread” is a new alert that notifies traders when the spread of the NYSE Specialist becomes unusually large. (Note: NYSE only, not available for NASDAQ stocks). This alert helps those traders who are proficient with working orders and Specialist behavior to take advantage of unique and special circumstances. Like what?

Take the following scenario:

Imagine for a minute that you are a Specialist making markets in IBM. Some news breaks and – BANG! – IBM starts to run. You (as the Specialist) don’t want to quote an offer to sell that is right by the bid – you will get filled selling stock that is moving up quickly – so you up your quote 50 cents or more to protect yourself. That way traders that are sending market orders to buy from the specialist all of a sudden are buying 50 cents higher. When people realize this they may start to panic sell thus turning what would have been a bad situation for you (the Specialist) into a windfall.

Conclusion
The point is when things are in order the Specialist keeps the spread more or less tight. But when something happens that is unusual the Specialist’s spread becomes wide and acts as a hedge. It’s simply an indication that something is happening – something you can be alerted to as a possible opportunity.

Strategy Example
Here’s how the alert is used within a set-up called, “Beat the Specialist“. It uses filters to find stocks trading at least their average current volume, with a volatility movement of at least 10 cents/15 minutes. Use the set-up as is or modify it to your own trading plan requirements.

June Seminar Footnote
To gain a full understanding of how this alert and others can help you in your trading plan, we suggest you attend our training seminar in June. There we will focus on all the advanced aspects of our software needed to give you an edge against larger, more capitalized participants.

We just opened the sign up page so that you can officially pay for and reserve your spot (conference limited to 100 existing subscribers). https://trade-ideas.54solutions.com/Seminar/