11–20 of 76 posts
Seems to me like an easy explanation is that a whole ton of firms wouldn't want to hold anything overnight because you can't respond to it until the next morning? So they pile in in the morning, and exit in the afternoon.
important news is often released b4 market open or after close, or pundits will hype the stock over the close. Manipulation, such as gapping the price higher or lower to make profit from options or increased liquidity of regular trading hours. So you spend $10 million in the pre-market hours to make a stock open 5% higher and then use the extra liquidity to unload a $100 million position at the open while also sellin…
important news is often released b4 market open or after close, or pundits will hype the stock over the close. Manipulation, such as gapping the price higher or lower to make profit from options or increased liquidity of regular trading hours. So you spend $10 million in the pre-market hours to make a stock open 5% higher and then use the extra liquidity to unload a $100 million position at the open while also sellin…
Tangential question: why isn't the stock market open 24/7/365 (minus periodic maintenance of the computer systems)?
Seems to me like an easy explanation is that a whole ton of firms wouldn't want to hold anything overnight because you can't respond to it until the next morning? So they pile in in the morning, and exit in the afternoon.
There are lots of firms and funds and floors that never hold overnight, but this research demonstrates that that is basically a statistically losing strategy. If you follow markets it's almost impossible to not notice that almost all the real action happens after hours, and the day's trading tends to "erase" whatever happened overnight. Bruce's research is hard to contradict, unless the data is wrong or his formulae or off.
People tend to point out how much energy cryptos consume, is there an estimate for how much high frequency trading consumes world wide?
HFT uses energy as a means to an end (i.e. computation), while proof-of-work mining has an incentive structure that directly rewards energy expenditure. In other words, one is energy- (and hardware-)bound, the other isn't.
As a thought experiment: If fusion energy and self-replicating nanobots were to become viable tomorrow, how would that impact HFTs and proof-of-work mining, respectively?
> Fortunately, the other sentences in footnote 78 contain no words that start with v, so we should be able to take them at face volume. Savage. I saw lots of charts & graphs & flashy wordsmithing, but I didn't actually see any evidence or examples of firms doing unscrupulous trades. I'm not an expert, but I know better than to dish it out better than I can take it. My opinion is that these "exemplary" market returns…
Yes indeed. The author claims that there is less risk in overnight positions than in intra-day positions. I think there's more. Firstly more time passes overnight and secondly the lack of liquidity means you can't unwind overnight positions if you need to.
important news is often released b4 market open or after close, or pundits will hype the stock over the close. Manipulation, such as gapping the price higher or lower to make profit from options or increased liquidity of regular trading hours. So you spend $10 million in the pre-market hours to make a stock open 5% higher and then use the extra liquidity to unload a $100 million position at the open while also sellin…
Tangential question: why isn't the stock market open 24/7/365 (minus periodic maintenance of the computer systems)?
crypto markets don't have this issue and are open 24/7
Seems to me like an easy explanation is that a whole ton of firms wouldn't want to hold anything overnight because you can't respond to it until the next morning? So they pile in in the morning, and exit in the afternoon.
Yeah this is so obvious I would hope it could be controlled for by the Analyst. There are simply a lot of funds and traders who, by policy, do not hold positions overnight.