Questions tagged [markets]

to be used for any question related to financial markets including share/securities markets, money markets, foreign exchange markets, commodities markets, bond markets, etc.

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2answers
109 views

Why oil traders selling oil on the day before expire date but not the other days earlier than that?

As you know, the oil price was negative on April 20th 2020 due to the future contracts expiration date. I am wondering why traders had to wait until 1 day before expiration to close the position (sell ...
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2answers
124 views

Price discovery and index funds bubble

I have read an article and watched a couple of videos about a possible index fund bubble. One of the arguments to justify this bubble is (if I have understood it correctly) that a very huge ...
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1answer
34 views

Why does rollover helps to cut cost of current contract?

Offsetting involves closing a position. Rollover involves closing a position and opening a new one. Is offsetting a part of rollover? If not, what is the strategic difference between these two? ...
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2answers
43 views

the impact of drop in oil prices financial markets performance and prospects? [closed]

Supporting that there is a correlation between oil prices and stock market. What could be the implications of low oil prices on the financial markets performance and prospects?
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1answer
36 views

the impact of drop in oil prices on oil producing companies? [closed]

Oil exporting countries will have a negative impact with the decrease in oil prices while oil importing countries will benefit from it. What about oil producing companies?
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1answer
57 views

What is the loss difference between offseting and rollover the contracts?

If you are long a futures contract that comes near to expire, you have two options: Offset the position or rollover the contract You have to take delivery of the underlying commodity For example, ...
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2answers
82 views

What happen to the Oil Contracts which are sold when there are only a few buyers?

If you don't want physical delivery, then you have to sell your futures contract before it expires. And what happened on April 20th is that oil prices went negative since there are lots of sellers and ...
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1answer
29 views

How come rollover the futures maintain the risk position?

I am still wondering about the risk difference between offsetting a position and rollover. As I know, both offsetting and rollover are involved in selling the initial futures contract ( which gives ...
98
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5answers
12k views

What does it mean for the price of oil to be negative?

The New York Times website currently has this graph, showing that the price of "West Texas Intermediate, May contract" is $-13.10. Does it literally mean that someone's offering $13.10 to take a ...
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3answers
457 views

How does the fluctuation in the foreign exchange market occur at the same time in all countries?

How does the fluctuation in the foreign exchange market occur at the same time in all countries? For example: If the U.S. Dollar depreciated, does it — and how — get automatically ...
39
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1answer
4k views

How close is the fate of Berkshire Hathaway tied to Warren Buffet?

We all are humans. Humans are mortal, and so is Warren Buffet. Given he is an elderly man close to 90, it is quite likely that he will pass away in the next years. Sad events like these often cause ...
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13answers
14k views

Why isn't the market dropping like a stone with all the bad news?

So I am reading and listening to the news, watching the numbers re Covid-19, listening to and reading apocalyptic accounts of the coming recession, hearing of record breaking unemployment reports and ...
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1answer
30 views

How market regulations in different countries affect to the investment risk [closed]

There are some countries that have less market freedom than others (see Index of economic freedom by countries. Let's take into account only developed countries (USA, EU, UK, Australia etc.). Do ...
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3answers
113 views

Can I make a profit on a put option when I'm out of the money?

Yesterday I bought LB put option with a 5 strike for .28 expires in 21 days. Whenever I bought the put, the premium(ask) went up to 4.90. I understand that you can make money selling the premiums only....
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2answers
308 views

UK First time buyer- offer accepted on house: Should I reduce offer due to coronavirus?

I live & work in the UK. A few weeks ago, I had a verbal offer accepted on a house (I am a first time buyer). I had initially offered a bit lower than the asking price, that offer was rejected, ...
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2answers
276 views

What is moving the cryptocurrency market apart for speculators?

I would like to know if there is anything that moves the crypto market apart from the speculators, or are cryptocurrencies purely speculative? For example, in the oil industry there are hedgers who ...
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2answers
402 views

Planing to invest into DAX/S&P500/NASDAQ100 soon. Should wait for market crash?

I hope this question isn't too opinion based, even if I'm afraid it might be. Looking at historical data, one could argue that a market Crash in 2018/2019 might probably happen. Obviously no one can ...
2
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1answer
117 views

What happens to annuities in a long bear market?

Annuities are insurance contracts which establish regular payments to an individual by the insurance company, typically lasting until said individual's end of life. Usually, the individual gives the ...
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2answers
221 views

Is complete divestment possible?

Some climate activists have called for fossil fuel divestment. But anything that is sold is also bought. Is divestment then even possible? For example, suppose that all businesses, pension funds, ...
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0answers
135 views

Is buying and selling stocks at the same price market manipulation?

At the end of the year, it might make sense to sell some stocks which currently are in the red to compensate gains made by other stocks for tax reasons. Usually, people only hold stocks if they are ...
2
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1answer
68 views

LIBOR Reform creates Winners and Losers

One phrase I heard of the reform to move away from LIBOR is that it would create winners and losers. Can someone explain how this might happen?
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1answer
92 views

Correlation between the perfect market-timing strategy and the market itself?

What would be the correlation between a perfect market-timing strategy [that it always goes long (short) one unit of the market the day before the market goes up (down)] and the market itself, given ...
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3answers
93 views

Order Book - Does the price (ask or bid) depend on the size of the order?

I still haven't quite grasped the concept of order book. In fact I still have a few questions like the one in the title. I understand that in a market, at any given time, there is a list of pending ...
2
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0answers
45 views

Do banks need a foreign branch to access a derivatives market (e.g.) London

I would be very interested to know whether banks (e.g. Santander, Deutsche Bank, etc.) need a foreign branch in a country (e.g. UK - London) to access the derivatives market in this country. Would ...
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1answer
122 views

Why market makers price themselves?

Why bother with army of quants and complicated pricing models and not just use market price to set your bid/ask and adjust the spread to something sensible and profitable? I understand if everyone ...
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2answers
124 views

Is Buy X sell Y equivalent to sell (y-x)?

Suppose I have 2 trading strategies that independently comes to a conclusion, that in a market day, I am supposed to Buy X shares of Stock A and Sell Y Shares of the same stock A. Now, this need to be ...
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1answer
82 views

NPV and efficient market hypothesis

If I have an opportunity of investment that costs I in year 0 and gives me CF_1 in year 1, I will accept it only if NPV>0 NPV = -I + (CF_1)/(1+k) Now in order to discount the cash flows I have to ...
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3answers
172 views

Interest rates and what does “discount” mean?

I was reading an article that says "Interest rates play an essential role in financial markets. Foremost, they represent the rate at which investors discount risk-free as well as risky future cash ...
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2answers
186 views

What is the difference between Overnight Repo Operations and Term Operations When talking About the Repurchase (Repo) Market?

According to the NY Fed website: In accordance with the most recent Federal Open Market Committee (FOMC) directive, the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New ...
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3answers
155 views

Bid and Ask in Stock Market

Further to the discussion on "Can someone explain a stock's "bid" vs. "ask" price relative to "current" price?"Chris W. Rea answered: In a stock market, the bid and ...
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2answers
136 views

CDOs before the 2007 crisis

I read somewhere that before the financial crisis of 2007 the financial instruments (CDOs) were so complex that the investors could not analyze them. Were they just complex or was there no public ...
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4answers
323 views

How much would a trading robot which doubles money in a period of time sell for? [closed]

How would factors of this calculation change for the rate of doubling, scalability (the maximum amount at which it begins to become less efficient), risk and other factors you might bring up a ...
3
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1answer
333 views

Why all assets seem highly priced?

Thinking about All Weather strategy, I looked at a number of financial asset indexes and their prices over the past year: US Stocks US Medium-term (7-10 year) Treasury Bonds US Long-term (20+ years) ...
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1answer
4k views

How do brokerage firms make money?

I know that this question has been hinted at on other open question sites like Quora but I have yet to find anyone who lists all of the points in one place. I understand that firms make money by: ...
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1answer
137 views

Getting Started with Algorithm Trading [closed]

I was curious if it is feasible and worth my time/money to build a trading platform using external APIs and libraries or is it easier to use something like TD Ameritrade. In other words, are there any ...
5
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3answers
1k views

Does an individual share of a stock have some kind of unique identifier?

A security has an ID like a CUSIP or an ISIN. Does an individual share of a stock have some kind of unique identifier? The sort of thing that once would've been printed on a stock certificate, back ...
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1answer
47 views

Bond prices - present value

I'm reading a text of Macroeconomics - Financial Markets as a chapter. It has a line which states: "Suppose you hold two-year bonds. Because the price of a two year bond is $P, every dollar you put ...
8
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1answer
866 views

How are unmarketable market orders (other side of the order book is empty) matched with incoming orders? [duplicate]

Note: This question is erroneously marked as a duplicate. It concerns a very specific situation with unfulfillable market orders in very illiquid markets, one that no other discussion here has covered....
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4answers
301 views

How can I find out what factors are making a stock's price rise?

For example: Fannie Mae went up ~20% today, February 3, 2011. How come? What websites have you found to be useful in returning relevant information? It seems to me Yahoo Finance is not very good at ...
3
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1answer
163 views

How to invest in a specific market without investing in a specific company?

Let's say I am bullish on "Cloud Computing" and I want to make one investment, but do not want to invest in any specific company (e.g. Amazon). How could I invest soundly in the "Cloud Computing" ...
39
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8answers
32k views

Why do gas stations charge different amounts in the same local area?

I've noticed there can be a 5%-10% difference in the price of gas where I live. For example right now the cheapest premium price is $3.85 and the most expensive is $4.17. It's the same state and ...
4
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2answers
569 views

What causes S&P 500 to grow faster than inflation? [closed]

Facts Average annual rate of USA's inflation is ~2% for the past couple of years Average annual return of S&P 500 is 10% Why? Many people suggest to move your money of your bank, which is maybe ...
3
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2answers
212 views

What do people mean when they say US 10 year Government Bond?

I am very new to investing and I am particularly interested in fixed income product. I am just wondering what do people mean when they say US 10 year Government Bond? This term confuses me as I can ...
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4answers
270 views

Efficient market hypothesis

According to the efficient market hypothesis, does the price of a stock take into account the company's growth prospects? It says that it is hard to find undervalued stocks but theoretically, is it ...
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5answers
829 views

Is it possible that any security listed in one country but trades in another country

For example a company which listed in Europe but trades in US market or vice versa. Could you please provide few examples of such securities. I found that depository receipts are foreign company's ...
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2answers
431 views

How does a company have a net loss in their income statement, but their stock market value still rises?

For example in the case of Tesla, they always have a net loss in their operating income, but still their market value keeps increasing. What do the shareholders get as dividend? Do shareholders get ...
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3answers
779 views

Is there benefit in waiting for a stock market to open?

I am planning to purchase shares of a particular company that produces electricity using renewable wind power. The share price after market closure yesterday was 13.60. The price has been remarkably ...
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1answer
144 views

Does divestment work?

Divesting from funds seems to be a vogue topic which I am hearing more about. The most prominent stories seem to be related to fossil fuel investments and national pension schemes. These institutions ...
5
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2answers
1k views

Are there multiple Bitcoin markets?

I have the (possibly wrong) suspect that Bitcoin questions are not received too well here, so I kindly ask you to go easy on me :-) According to this question we should categorize Bitcoin as a ...
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1answer
127 views

Margin accounts and futures delivery

I'm trying to understand the market mechanics of futures with delivery. For sake of example, assume 0 interest rates and no cost of carry, and that I bought a futures contract on Jan 1 with Feb 1 ...