What time do institutional buy/sell programs kick in? (April 26, 2001)

  There is not set time, though they often are most active at the open and at the close. That is why we see the heaviest volume of the session in those two hours. Much of the morning action has to do with the futures and the spread between the futures contracts on the indexes and the actual prices of the indexes. It gets pretty complicated, but if the spread between the price of the index and the price of the futures is greater than fair value, it is more attractive to buy the index and thus the programs drive the market higher. If the spread is less than fair value, programs sell the index and buy the contract, and the index falls. Now some programs buy certain stocks in baskets when they hit certain values, and sell them at other values. Thus they can kick in at any time.

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