Many people [like me]wasted valuable time making ineffective trades due to not understanding a key point about the contest.It does seem like they are emphasizing it more this year but still it bears repeating.The TV ads say you can trade 7 days a week …. but how can you trade when the market is closed?.Well it does not matter because the way the contest is set up it is not really daytrading..meaning buying and selling stock repeatedly in a single day and at the end of the day tallying up your gains or losses..People who trade in the market for real will have to adjust there style since “DAYTRADING” CAN’T BE DONE.The stocks you purchase during any given day are priced as of the close of trading at 4 pm EST.So there is no reason to sell a security that is not at least a day old.This rule lends itself to traders who buy “event” stocks.For example today PCLN reported earnings.This stock has climbed a wall of worry from the single digits by continuously beating the earnings estimates and proving naysayers wrong.After reporting tonite the stock was up $20 from its closing price.So a excellent technique would have been to have bought that stock anytime today[thursday] and sell it anytime tomorrow when hopefully it would still be up the $20 that it was in the after hours session.Note that if the stock was trading at say 148$ at 1 pm tomorow[friday] and you entered a sell order you would not be credited at $148 if it closed at say 134$ at 4 pm EST[friday];your trade would go in the records for your contest entry at the closing price of 134$ even if the stock traded at $148 intraday when you pushed the sell button in the contest..So in our example PCLN closed today at $123.94.If tomorrow it closes at $134 you will be credited with $10.06 profit for each share you bought today[thursday] prior to 4 PM est and sold tomorrow[friday]prior to 4 PM est.It seems simple but make sure you understand the timeline of what price CNBC is using to value your trade!2008-05-08

Tags: must hold stock overnight to trade cnbc contest

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