Market-On-Close (MOC) Order Flow
Why the Nasdaq Spikes at 3:50 PM
Ever noticed those weird spikes on the Nasdaq around 3:50 PM ET?
The market’s moving along, then suddenly, boom, a burst of volatility, a wide-range candle. Def an attention sharpener if you’re already in a scalp and not ready for it!
Let me show you…
PRICE SPIKES
Like this: (my x axis is BST; 20:50 = 3:50pm ET)
Or this:
Or this:
3:50 PM on the dot, large range, large volume bar.
So, what’s going on?
It’s MOC orders — Market-On-Close.
These are institutional orders that are set to execute at the closing price.
And at 3:50 PM ET, the NYSE releases the imbalance data, showing whether there’s a skew to buy or sell into the close.
eg:
MOC Imbalance
S&P 500: +582 mln
Nasdaq 100: +204 mln
Dow 30: +344 mln
That imbalance?
Big players and algos have to scramble to hedge, rebalance, or manage flow… and it moves the tape.
Market Chameleon has a great video explaining it all here
So, What Should You Do?
Is there a reliable strategy based on these imbalances?
Honestly… maybe. But it’s not obvious to me if there is.
There does seem to be a more exaggerated move around the release lately, but whether there’s real edge in that or not? dunno.
Let me know if you’ve spotted something.
For now, I reckon just be aware.
If you’re holding a position near the close, especially on an index future or a big tech name, watch out for sudden whipsaws around 3:50 PM.
Adjust your stops, manage risk, and don’t get blindsided.
And if you don’t trade US indices? Well, you just became Mr Exciting at the next BBQ…