Day Trading

As the title says, does anyone here day trade?

Any methods of success that you have found or use?

Thanks.

I’ve got a question about National Semiconductor.

I read this in the NYT this morning :

[quote]Texas Instruments said on Monday afternoon that it had agreed to acquire National Semiconductor for $6.5 billion in cash.

The deal would combine two leaders in analog semiconductors, a $42 billion market last year. Analog chips process continuous signals, as opposed to 1’s and 0’s, and are used in thousands of products, many of them digital, from cameras to medical products.

Under terms of the agreement, National stockholders will receive $25 in cash for each share — a premium of 78 percent to National Semiconductor’s closing stock price on Monday… . .[/quote]
dealbook.nytimes.com/2011/04/04/ … illion/?hp

and was totally baffled to see NSM’s stock didn’t skyrocket yesterday. In fact it went down slightly and is trading at 14.07.
google.com/finance?q=NYSE%3ANSM

So what’s the deal? If one buys shares at 14.07 and the deal closes, one can sell at 25, right? So why didn’t NSM’s price shoot up to 25 yesterday? Don’t tell me the news just isn’t out yet and I’m ahead of the pack – at the very least there are thousands of hedge-fund managers and institutional investors managing billions of dollars who would have snatched up NSM if it were such a sure thing, right? So what gives?

Ahhhhh. Maybe I AM ahead of the game.

When the market closed, NSM was trading at 14.07, but WSJ says:

online.wsj.com/article/BT-CO-201 … 12592.html

So what happens if I place an order to buy at market price?

When the market opens tomorrow, NSM will be flooded with buy orders (and presumably no one will be selling). Is there no way in hell my order will be placed before the price has shot up to $25? Is it clearly futile to even try to get in on this action?

[quote=“Mother Theresa”]Ahhhhh. Maybe I am ahead of the game.

When the market closed, NSM was trading at 14.07, but WSJ says:

online.wsj.com/article/BT-CO-201 … 12592.html

So what happens if I place an order to buy at market price?

When the market opens tomorrow, NSM will be flooded with buy orders (and presumably no one will be selling). Is there no way in hell my order will be placed before the price has shot up to $25? Is it clearly futile to even try to get in on this action?[/quote]

Market orders can be filled at any price. Limit orders are probably safer.

True, but if I place a limit order at 24, it won’t be filled will it? Won’t the price tomorrow instantly shoot up to 25?

That limit order may not be immediately filled, but you’d be protected if all the market orders flood in at opening bell and spike the price to the HOD. If you have access to real time quotes, preferably level 2, you can try putting in a limit order for the ask.

There are all sorts of reasons why it may not hit the $25 price. You have missed the boat - move along.

Well, sure I missed the boat. I’m aware of that. I would’ve had to place my order the first night, after the proposed acquisition was announced (after hours) and before the market opened the next morning. But I didn’t because I figured it was futile as the stock immediately shot up in after-hours trading and I figured there was no way an order could then be filled for a lower price. Once the announcement was made and the stock shot up after hours, who would then agree to sell for a lower price? Only a fool. And it seemed extremely unlikely there could be enough fools to outweigh all the buy orders being placed.

Incidentally, the stock did shoot up instantly the next morning, by 67%, to $24.07, where it has remained ever since.

Mayo wente. I don’t want to dabble in day trading and other speculation. I’m trying to finally learn to be an intelligent investor, determining real intrinsic value in companies, winnowing those good companies further to only the extreme few that are relatively cheap, and waiting for one of them to finally drop to a point where there’s a safe margin of error to make the purchase and hang on until it eventually rises to its true worth – you know, the Buffett way.

That’s why I didn’t purchase TEPCO based solely on Japan’s catastrophe and without knowing anything about the company’s past performance. And that’s why I didn’t bother trying to take advantage of NSM’s instant gain of 67%. Sure, instant riches are great; but they also bear the risk of instant losses and I’m getting too old for that.

If you’re serious about day trading, then you absolutely MUST read “The truth about day trading stocks - a cautionary tale” by Josh DiPietro.