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What to know about the stock market (2007)

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Re: What to know about the stock market (2007)

#361

Post by is0tope »

ra7 wrote: post #287
is0tope wrote: post #224

Earlier quoted context omitted.

As others have mentioned this depends on how matching works on the exchange. The case where the bid is higher or equal to the ask is known as a "crossed book". I most cases, this should never happen and if it does it would be as a result of a bug in the matching algorithm. If you place a buy/sell order with a price that is in excess of the best ask/bid respectively then that order will be matched against the opposite…

Thank you for this! This is exactly what I was looking for.

No problem, glad it was helpful!

Re: What to know about the stock market (2007)

#362

Post by arbol »

headmelted wrote: post #54
sdevonoes wrote: post #11

Am I the only one in HN who is not into the stock market? I live in Western Europe and I would say 75% of my acquaintances don't do stock market. People I have known in the past (old people) didn't do stock market either. They all seem to have lived a normal life (decent jobs, decent house, decent family). Nothing extravagant but they got enough money to be "happy" in life.

Also Europe here, and leaving aside what others have said about how everyone is invested in the stock market whether explicitly or not (which is entirely true), this rings true for me as well - it's also backed up by data. In the US, the majority of adults are invested in the markets ( https://news.gallup.com/poll/266807/percentage-americans-own... ), whereas in Europe the number of people invested has historically b…

> In the late 1990's it was clear and readily apparent to everyone that the Internet was a massively important step forward. We agreed on that. It wasn't a controversial or widely disputed viewpoint. The market still imploded because of the sheer amount of rampant speculation, so to think something worse won't happen to a multi-trillion dollar market based on a technology many people think only has value for running Ponzi schemes seems to be pretty irrational.

In the 1990s it wasn't clear to everyone that the internet was a massively important step forward. You were younger and probably part of the technically-savvy, forward-looking generation that could clearly see the internet being massively important in future. However, *many* people in the older demographic lacked this insight and didn't fully embrace the internet until the mid to late 2000's. I think we'll see the same thing play out with crypto. Writing everything off in the sector as being ponzi is especially flippant.

Re: What to know about the stock market (2007)

#363

Post by carnitine »

nly wrote: post #360
bidirectional wrote: post #343

Earlier quoted context omitted.

Yes, they make a few billion between them in an ultra-competitive, expensive to compete in environment. My wording wasn't the best, but what I meant is that HFT firms only compete with other HFT firms. They're basically all battling to offer the cheapest service possible to other market participants, and can offer even better prices to retail due to the non-toxicity of the flow. Virtu has a market cap of what, 6bn? C…

Most prop trading firms arent public. Rentec have something like $150bn under management and are making 20-40%/yr return. If they had a public "market cap", they'd be huge

Medallion makes those returns and is capped at 10bn. The rest is more traditional fund management (and performance isn’t great).

Also from what I understand Medallion is HFT in one sense (fast trading with short hold times) but not to the point proper firms are where being fastest is necessary for edge.

Re: What to know about the stock market (2007)

#364

Post by hnbad »

sokoloff wrote: post #91
hnbad wrote: post #66

Earlier quoted context omitted.

German has extremely liberal inheritance taxes. On the one hand this is often justified with the existence of the German "Mittelstand" (medium sized businesses typically owned by one family over generations), on the other this means the easiest way to get rich is to have rich parents. Low inheritance taxes are actually a great predictor for maintaining social inequality over generations. If you wanted to reduce socia…

That reduces social inequality, but that is not the singular goal of a society. Producing goods and services and wealth for the nation is a goal that competes with “tax away almost all the gains of these activities”, which is why there’s debate about how to balance these things.

Frankly, who is "the nation" if not its people? As long as even a single individual suffers poverty, "the nation" has failed. If "the nation" is its people, protecting every single person from hardship is a higher goal than allowing a minority to live in excessive luxury.

If you think the "wealth of a nation" is measured by the luxury of a few rather than the poverty of the many, you might as well just revert to feudalism.

Re: What to know about the stock market (2007)

#365

Post by andruby »

jliptzin wrote: post #352
baobabKoodaa wrote: post #100

Earlier quoted context omitted.

It doesn't work like that. You can't cancel a bid/ask after someone in the market takes you up on it.

You can move your ask up as bids get closer

Sure, but market orders or bids that cross your ask will trigger a transaction at your ask price.

I’m sure quote stuffing happens, especially deeper in the order book. Or with very small amounts closer to the cross.

Re: What to know about the stock market (2007)

#366

Post by hnbad »

llampx wrote: post #127
hnbad wrote: post #42

Earlier quoted context omitted.

Not the parent, but I live in Germany and while the new coalition government is expected to push for moving he public pension system to stock based pensions, the current system consists of a public pension system (that employees pay into via their employer to pay out current recipients who previously paid into it) and a private pension system everyone is strongly encouraged to pay into. As I understand it the private…

Watch the Ampel get into the stock market at its peak and put off an entire generation from the stock market, yet again.

From a leftist point of view the most frustrating thing about red-green is that they market themselves as progressives and leftists but then just follow the same neoliberal economical politics as everyone else. It's deeply ironic that the reforms that did away with large swathes of the welfare state and labor protections were implemented by a red-green coalition government, not conservatives or the FDP.

The lesson most voters take away from this seems to be that leftism is just false advertising and if you vote for leftists you just get the same politics but more dishonest, not that the "leftists" they keep voting for aren't actually interested in leftist politics (though I can see why Die Linke might be unappealing as they're a headache even if you see them as the only viable option).

Re: What to know about the stock market (2007)

#367

Post by aliswe »

andruby wrote: post #72
gokhan wrote: post #13

Earlier quoted context omitted.

Why? Clearly, no one is actually willing to trade at those prices. Sometimes, one illogical price in illiquid markets drive the orderbook to illogical extremes. Without a transaction, all are meaningless.

But they _are_ willing to trade at those prices. The person who posted the highest bid is willing to buy at that price and the person who posted the lowest ask is willing to sell at that price. Both regardless of the last trade price. The lack of "crossing" between those two doesn't mean no one is willing to trade.

So is your sibling comment wrong in naming them predictions?

(edit: inserting disclaimer "serious question" lest i get downvoted)

Re: What to know about the stock market (2007)

#368

Post by shoto_io »

bestcoder69 wrote: post #242
shoto_io wrote: post #207

Earlier quoted context omitted.

Who is “they”?

Owners of the index funds, like Vanguard. And Vanguard, in turn, is owned by... wait a minute... oh no... I'm realizing I can't say anymore.

thanks. got it. I have no clue why you're being downvoted...

Re: What to know about the stock market (2007)

#369

Post by baobabKoodaa »

jliptzin wrote: post #352
baobabKoodaa wrote: post #100

Earlier quoted context omitted.

It doesn't work like that. You can't cancel a bid/ask after someone in the market takes you up on it.

You can move your ask up as bids get closer

The context here was the highest bid / lowest ask. The context was not orders deep in the order book. If your order is the best order available in the book, anyone can just take it, and you will not have any time to move your order before a trade is executed.

Re: What to know about the stock market (2007)

#370

Post by nly »

globular-toast wrote: post #204

Ah, I never fully understood how the market maker worked. I intuitively understood that buying/selling at market price gets you an instant trade at a possibly slightly worse price but didn't realise the market maker made money from that. One thing the article doesn't mention is why people buy and sell stocks. The stock market used to be for companies to raise funds before they turned a profit. Usually for businesses…

Stock markets allow for price discovery. The market gives a verdict on what it thinks stock in a given company is worth, and it's there in public for all to see.

They also allow liquidity. A public company can't stop you from selling your stake, or buying more. This is something you'd definitely value if you've ever been screwed out of equity at a startup.

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