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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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189
votes
13answers
48k views

Why would a company care about the price of its own shares in the stock market?

After a company has issues shares, why should it care if the value of the shares go up and down? Since the shares are now being traded among the public, if the value goes up or down, that is strictly ...
41
votes
6answers
56k views

Maker taker fees - can somebody explain in plain english?

I'm interested in learning about how trading works, but this is all very new to me so bear with me. (I'm just poking around at this point, obviously nowhere near ready to actually be trading) Some ...
39
votes
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 ...
23
votes
3answers
10k views

What is the cause of sudden price spikes in the FOREX market?

I just started trading currencies on the FOREX market and notice that, sometimes out of the blue, there is a spike of massive PIPS in an instant. Who has the power to do that and why would anyone buy ...
22
votes
4answers
7k views

Did an additional $32 billion necessarily get invested into Amazon.com stock on October 26th, 2017?

The share price went up about 6.9%, and the market cap is $466 billion. Does that mean that that much new money had to have been invested after hours? Would it otherwise be possible for the stock ...
18
votes
3answers
27k views

How does a dealer (or market maker) earn the bid-ask spread on a stock?

If I am correct, dealers purchase assets for their own accounts, and later sell them for a profit from their inventory. But the spreads is the difference between buy (or "bid") prices and sell (or "...
16
votes
4answers
1k views

May 6, 2010 stock market decline/plunge: Why did it drop 9% in a few minutes?

Today (5/6/2010) the market dropped almost 900 points in less than an hour. I don't see any news story that explains the drop. Am I missing something obvious?
15
votes
4answers
19k views

How do currency markets work? What factors are behind why currencies go up or down?

How do currency markets work? What factors are behind why currencies go up or down? What roles do governments, central banks, institutions, and traders have in the process?
13
votes
5answers
5k views

Does Joel Greenblatt's “Magic Formula Investing” really beat the market?

Background Joel Greenblatt's book "The little blue book that beats the market" is based on the premise that he has developed a magic formula. I am heavily skeptical of anyone who claims that they ...
12
votes
5answers
9k views

Why does a stock's price fluctuate so often, even when fresh news isn't available?

I get it that the price of a stock goes up and down as fresh news is released, positive or negative. However, fresh news is released only at certain times while the price of a stock changes (by ...
12
votes
3answers
962 views

How is exchange rate calculated?

assume that there is a very new island-country called xland. they decide to name their currency xdollar and there is 1000 xdollars in circulation. the very first foreigner comes and wants to exchange ...
12
votes
2answers
2k views

What does it mean to invest in potatoes?

There is an amusing thread on Reddit where people discuss what they would do with an unlimited supply of potatoes: http://www.reddit.com/r/AskReddit/comments/37yawp/...
10
votes
3answers
23k views

How and why does the exchange rate of a currency change almost everyday?

How does the exchange rate of a currency change every day? Why does that happen? Please explain to me with a naive approach and avoiding financial jargon.
9
votes
2answers
2k views

Why did the stock chart for Facebook's first trading day show an initial price of $42 when the IPO price was $38?

Facebook was widely reported as having an IPO price of $38. Yet, all the stock charts show Facebook shares priced at $42 until around 11:30 AM, than dropping to $40, and then only at 11:50 AM ...
9
votes
2answers
388 views

What investments are positively related to the housing market decline?

What investment sectors/areas generally go up when housing prices decline?
8
votes
3answers
874 views

is the bankruptcy of exchange markets possible?

Because exchanged markets like NASDAQ or NYSE are normal public businesses can they go into bankruptcy ? Supposedly they went into mysterious bankruptcy then what will happen to the listed companies ...
8
votes
2answers
3k views

Definition of “secular” in the context of markets?

When fund managers makes statements like this... "... [many market] inefficiencies persist for years due to the long-term nature of secular and structural changes [...]" ... I assume that they are ...
7
votes
3answers
933 views

Efficient markets hypothesis and performance of IPO shares after lock-up period

It's noted here that the Linked In shares dropped 7% after restrictions on insiders from share sales expired. The layman explanation is that a greater supply of shares, and a desire amongst at least ...
7
votes
1answer
792 views

Who sets the price and provides the quoted price values for stocks?

I somewhat understand that the price of stocks is determined by the market, but who exactly changes those prices that we see listed on Yahoo! Finance for example? If I own a share in a company listed ...
7
votes
5answers
12k views

Looking for a stock market simulation that's as close to the real thing as possible [closed]

The title says it all. I'm looking for a simulation stock market to play around with. One that is, ideally, as close to the real thing as possible. I've heard that Investopia is a pretty good ...
7
votes
1answer
677 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....
7
votes
2answers
5k views

Market Making vs Market Taking (Quotes vs Orders)

This is in by no means a duplicate. I've found similar questions that didn't clarify. I'm simply wondering if there is a relationship between quote driven markets (market making) and order driven ...
6
votes
7answers
1k views

How to make money from a downward European market?

The trader Alessio Rastani speaks in a BBC interview about the development of the Euro zone and his predictions are quite severe. He predicts a crash within the next 12 months but is also telling ...
6
votes
2answers
402 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 ...
6
votes
5answers
4k views

Why do stocks go up? Is it due to companies performing well, or what else? [duplicate]

I searched for this question but I didn't get any convincing answer. What everyone says is that if a company does well (I assume this means the company has good returns on its projects) then people ...
6
votes
5answers
2k views

Why are the prices of some commodities (e.g. oil) more volatile than others?

Why are the prices of some commodities (e.g. oil) more volatile than others?
6
votes
1answer
232 views

Can mutual fund prices have opening gaps? Might my order to be filled at a higher price?

My broker offers limit orders on mutual funds. I was curious if mutual funds have open gaps like stocks do. If I want to buy a fund if it goes up to a certain price, would it be safe to set a limit to ...
5
votes
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 ...
5
votes
4answers
238 views

Is debt almost always the cause of crashes and recessions?

It seems every great crash, the underlying fundamentals always point to an ever increasing debt until it becomes unsustainable and bursts. How true would you say is that statement above?
5
votes
2answers
474 views

Mutual fund operations: How do mutual funds deploy incoming cash from investors in a fund?

I know there are many different answers for this depending on the strategy of the fund. I have heard that some funds invest cash from incoming fund purchases into money markets until they are ready ...
5
votes
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 ...
5
votes
4answers
298 views

Does bull/bear market actually make a difference?

This may be an extremely naive question, but it is often discussed on the news, here and in person (at least in financial circles) that it is easy to make money in a bull market, and harder to make ...
5
votes
4answers
22k views

How does a high share price benefit a company when it is raising funds?

A company about to raise money desires a higher share price, because that will permit them to issue less shares for the amount of money they need. If the share price drops, they would need to ...
5
votes
1answer
1k views

Why government bonds fluctuate so much, even though interest rates don't change that often?

Why do government bond prices fluctuate on a daily basis on the bond market? I can understand the fluctuation of corporate bonds because they are tied to the credit worthiness of the company and ...
5
votes
1answer
284 views

Who sets the prices on government bonds?

I noticed my country Greece wanted to sell bonds last year and they were stating "If they go above 7% we won't sell.". But who sets the price if not them? Why can't they say "the price is 5% and if ...
5
votes
2answers
161 views

Short-term robots and long-term investors in the stock market

Recently there are more and more robots that follow the short-term trends in stock markets and use it to bring immediate rewards to their owners. Since rewards don't come from thin air, this ...
5
votes
2answers
46k views

Will a company's stock price be affected when warrants are issued, or exercised?

A company has 500 million outstanding shares, and it issued 100 million warrants 10 years ago. Assume that none of the warrants has been exercised yet. If tomorrow all the holders exercised their ...
4
votes
5answers
759 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 ...
4
votes
2answers
3k views

Meaning of capital market

From Wikipedia A capital market is a market for securities (debt or equity), where business enterprises (companies) and governments can raise long-term funds. It is defined as a market in which ...
4
votes
2answers
174 views

Is a book from 2005 about fixed income securities obsolete, or still relevant?

This is intentionally a very broad question. How much (if at all) has the fixed income securities market changed from say 2005 to present day? The main reason I ask is because I am debating whether ...
4
votes
2answers
392 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 ...
4
votes
2answers
96 views

What is the best resource to research the current state of asset classes for mutual funds?

I have a fairly simple asset allocation as follows: 50% Large Cap stocks 15% Small Cap Stocks 5% REIT 10% International Stocks 20% Bonds What is the best web site to track how each one of these ...
4
votes
2answers
2k views

Stock buyer and seller information, and abuse of anonymous markets?

Is it possible to know who offered/offers and who bought stock? If not, what prevents a group of people to buy and sell stocks between them to "fake" interest in that stock and pump up the price?
4
votes
1answer
419 views

Day Trading introductory books

I realize that day trading is considered to be highly risky, but the subject fascinates me and I would like to learn more about it as well as read about past experiences, both good and bad. Do you ...
3
votes
4answers
297 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
votes
1answer
226 views

Why are gasoline prices so hugely different between America and Europe?

I noticed in several cases it's triple or more.
3
votes
3answers
659 views

How can I find the historical stock price for a specific stock on a specific date?

I am looking for an old stock price of a company that subsequenty has merged with another company. I am looking for the stock price of Union Electric (UEP) on Oct. 12, 1992.
3
votes
2answers
330 views

Where does the stock go in a collapse?

During the crash at the end of 2008, pretty much everyone was selling their stock and the market tumbled approximately 50%. Who purchased the stock? Was it market makers or other people? I understand ...
3
votes
2answers
202 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 ...
3
votes
1answer
158 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" ...