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I don't understand this the WHY in NQ @ after hours.
There must be a profitable reason behind todays rip up seconds after the markets close, the market makers hi freq algos turned ON and catapulted NQ from 0% to .50% in like 2 mins. The question in my mind is why? No news, nothing. Why does big $ want to excite other algos to go in berserk mode together after markets close. Then about 5 to 10 mins the volume tapers off to a snails pace. Why would these institutions want to close the business day holding higher prices contracts, at the last minute after trading hours. Why not before when the price was higher, or lower. I understand the auction market, but this last rip up seconds after the market closes and contines with massive market buy orders, it makes no sense, there was no resting liquity at these higher levels at least on the DOM. Any quants here or people of understanding of the why?
Can you help answer these questions from other members on NexusFi?
As the market is an auction. Buyers need buyers for the price to move up, either passive or active orders. I understand the maket maker algos are playing the spread, so there quick scalps in momentum trading. But in the end someone(s) is holding the high price future, and the inverse is true, sellers need sellers until there exhausted. I'm still not fully understanding the WHY that's all.
Hard to tell exactly why the big spike in price occurred because we do not know the players involved and their intentions. I think you are on the right track with your ideas about the HFT and algos. There was probably a handful of large orders that were executed as market orders and the algos saw this and jumped on the train a fraction of a second later. I have seen market orders in the ES as large as 2K contracts that occurred at close. Something like this could trigger thousands of algos to move in one direction all at once.
