If you were watching the IBM tape late in the day, the stock started to sell-off significantly around 3: Your answer is a large sell imbalance was posted by the NYSE at 3: These sell imbalances are published every day at this time, and sometimes they can have a major influence on the price of the stock.

Money A2Z

The designated market maker DMM on the floor of the NYSE continuously logs all the buy MOC market on close orders, and all the sell MOC orders, on their security. And then at 3: It is a good idea to check with your data provider, to make sure they carry the imbalance feed.

Order Imbalance

Large buy imbalances will typically press the stock higher, where large sell imbalances will typically press the stock lower. In the IBM example, traders subscribing to the imbalance feed, seen the sell imbalance at 3: It worked perfectly in the case of IBM today, as the stock gapped down on the closing print.

It is not always that simple however. In this HFT world, many algorithmic systems will manipulate these closing imbalances, and sometimes in the last minute or two they will flip, causing a sell imbalance to go to a buy imbalance.

If that happens it catches many imbalance traders by surprise. Sometimes these imbalance plays get crowded as well.

The Definition of Close Buy Imbalance Stocks | Finance - Zacks

And if too many imbalance players are on the same side of the trade, the imbalance could also flip. In any regard, funny things happen after 3: This entry was posted by Dennis Dick on April 16, at 9: Follow any responses to this post through RSS 2. Both comments and pings are currently closed.

Understanding Imbalances If you were watching the IBM tape late in the day, the stock started to sell-off significantly around 3: Follow Dennis on Twitter. Follow Joel on Twitter.

Investing in stocks, options, and futures is risky and not suitable for all investors. Please consult your own independent financial advisor before making any investment decisions. All charts on our blog are provided by Think or Swim, Neovest.