Trading Strategies. Profiting from large premarket and afterhours spreads
Or how to make 10% profit while asleep.
This strategy wouldn’t work with liquid tickers like SPY so you need a stock that barely trades outside of market hours — low volume and large spreads (difference between bid and ask price).
You also need a broker that will let you trade 4AM to 8PM. There are only two I know — Moomoo and WeBull . I would recommend Moomoo over WeBull (see my other post), but both will work just fine.
My example is based on Biotech stock AQST.
Time is 4:27AM. Yesterday closing was $6.86, AH closing $6.95 and today only 20 shares traded at $6.95 (same price PM as AH).
You don’t really need level 2, although it’s nice to have to see what’s cooking.
I already had shares therefore I’m playing around ask price.
There was only one pending order for $7.85.
I try not to go too crazy (like some put $999,999,999 sell price) and picked $7.29 which is slightly below the high of the day from few days ago). Both orders you see 1) $7.29 sell 400 & 2) $7.29 7 ARCA (meaning 400 shares and 700 shares at the price of $7.29) are mine.
Than I go back to sleep to wake up to profits $$$
Once I’m done selling my shares at a crazy price, I put a buy order at/below reasonable market price to refill the shares I sold earlier.
If your account is not under PDT rule you can be placing buy and sell orders at the same time. I don’t do that as if the buy order gets filled first, the sell order will be counted as a day trade.
The other great purpose of this method is to give an extra boost to the sell price as your sale is now recorded alone with high % of premarket growth:
The high price is displayed on stocktwits and stock pops up scanners as premarket gainer (gap up):
That brings more buyers and stock starts trading at higher price on its own:
If you are an investor (like I invested in this stock for 1.5 months to catch pre-PDUFA run up), do not worry that you won’t be able to refill the shares at the decent price. I can guarantee that you will definitely buy them back lower than you sold. Just place an advanced buy order and let it get filled.
There are multiple sell off time periods in the morning that will let your advanced buy order to be filled:
At 7:00 AM when TD Ameritrade, E*Trade, Charles Schwab and Fidelity open
At 8:00 AM when Interactive Brokers and First Trade open
At 9:00 AM when Robinhood opens
At 9:30 AM when the Market opens
If you can keep an eye on the market you will catch even better price (I can’t as I either sleep, either work).
Good Luck and Happy Trading!
Free brokers to trade with: SoFi (get $50 stock): https://www.sofi.com/share/invest/2779489 Robinhood (get a free stock): https://join.robinhood.com/elenam158 WeBull (get 2 free stocks): https://act.webull.com/promotion/invitation/share.html?inviteCode=zW4fOA9EuMsy Moomoo (get 2 free stocks): https://j.moomoo.com/000ARZ
