From time to time I am forced to sell a few shares of WAVX, much to my dismay, in order to pay current bills. I always try to do this sale a little bit above the current bid/ask spread.
Today my open order to sell 500 shares of WAVX at 1.08, placed in the last 15 minutes of the session, failed to execute, yet TDWAterhouse reported a close of 1.09.
I called TDWAterhouse and asked what was going on. They informed me that the stock did not reach a sale price of 1.08. The TDW rep had to do some quick research and came back with the statement that the 1.09 close represented a NASDAQ "cross trade."
Here is the TDW description of the closing "cross trade":
What is the NASDAQ Closing Cross?
NASDAQ uses a method called Closing Cross to calculate the NASDAQ Official Closing Price (NOCP). This may impact how Market on Close orders are executed for all NASDAQ 100® Index, NASDAQ-listed, S&P 500® Index, and NASDAQ Biotech Index securities. To view or download a list of all Closing Cross securities announced to date and for more information, see www.NASDAQtrader.com/close.
Closing Cross offers the following benefits:
* Provides accurate and consistent closing prices for NASDAQ-listed issues.
* Determines market price based on supply and demand in the marketplace.
* Creates robust benchmark prices for Net Asset Value (NAV) and index valuations.
* Resolves natural order imbalances in critical events, such as index rebalances.
How Closing Cross works:
* NASDAQ accepts and stores new orders that can be executed only at market close.
* At 4 pm ET, the closing book and the NASDAQ market centerSM book come together to create a single NASDAQ Closing Cross.
* The resulting price on eligible securities is the NASDAQ Official Closing Price (NOCP).
Because the NASDAQ Official Closing Price (NOCP) is not based on the consolidated bid and ask, your NASDAQ Market on Close orders may fill outside the National Best Bid and Offer (NBBO).
Now if WAVX was sitting at .99 for a tenth day in a row, would NASDAQ report a 1.00 close?
I would very much welcome some discussion of this weird NASDAQ process.
AI
