What Are Opening-Only Orders?

Dennis Dick, co-host of Benzinga's Premarket Prep, shared a popular day-trading strategy he uses that involves opening-only orders.

Dick quickly pointed out that the use of this strategy isn't limited to traders with sophisticated trading platforms, and it is available on most retail brokerage accounts.

An opening-only order, also known as an OPG order, is a trade that is either executed on the opening print (that is the first trade at 9:30:00 a.m.) or automatically cancelled.

"Sometimes you like a stock, maybe it is trading up in the pre-market and you really want to buy the stock," Dick explained. "If it opens a little bit too low you want to maybe put an order out there to take advantage of that."

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Dick went on to offer a hypothetical example. Suppose shares of Verizon Communications Inc. VZ inched higher during a pre-market trading session, and the buying momentum is expected to carry over into the opening bell.

Dick would put in an OPG order to buy shares of Verizon at $52.15. If the first print at 9:30:00 is at $52.14, then Dick's order would get filled. If the first print is at $52.15, there is a chance the order could be at least partially filled.

The OPG order also offers the advantage of automatically cancelling after the market opens. This is valuable because "sometimes a lot of things change after the market opens."

Dick noted that often he would send up to 100 different OPG orders on various stocks, and it would be foolish for all the orders to just "sit there" — if the market were to suddenly reverse course, then non-OPG orders are likely to all get filled quickly.

Bottom line, an OPG order is either filled or cancelled, which is ideal for traders looking to take advantage of a stock that opens lower or higher than expected.

Listen to the full discussion in the clip below.

Premarket Prep is a daily trading ideas show that focuses on technical analysis and actionable short-term trades. You can listen to the show live every morning from 8–9 a.m. ET here or catch the podcast here.

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