Hot answers tagged

105

These are futures contracts that expire on 4/21, which means that if you hold a futures contract at the end of the trading day tomorrow (April 21st), then you are obligated to "purchase" 1,000 barrels (per contract) of oil for -$13 (effectively you get paid $13/barrel to take the oil). But that also means that you will need the means to transport ...


92

Market reactions to information are not always timely, proportional, or rational. We don't know the full impact of our current situation; we're feeling it out. Some people (bulls), believe that the initial dip was an over-reaction, that the government response will prevent further decline, and/or that things will go back to normal pretty quickly, so they ...


61

If you do not understand the volatility of the fx market, you need to stop trading it, immediately. There are many reasons that fx is riskier than other types of investing, and you bear those risks whether you understand them or not. Below are a number of reasons why fx trading has high levels of risk: 1) FX trades on the relative exchange rate between ...


61

Russia and Saudi Arabia have been ignoring production limits set by OPEC. At the same time demand for oil has crashed due to the Covid-19 pandemic and associated lockdowns. The result is an enormous glut of crude oil. Some nations like the US have been filling their strategic reserves, but those are nearing capacity, and storage is getting tight. The ...


58

The market reacts only to new information. It is already known that the new coronavirus has resulted in a pandemic. It was known long before the current situation. Having infections in most countries, and knowing the growth is exponential is enough. Not all people understand the power of exponential growth and how quickly its rate increases. Yet, there are ...


52

No, a jump in market capitalization does not equal the amount that has been invested. Market cap is simply the stock price times the total number of shares. This represents a theoretical value of the company. I say "theoretical" because the company might not be able to be sold for that at all. The quoted stock price is simply what the last buyer and ...


48

Let's assume you know reasonably well when a market crash will occur. There is significant risk associated with trying to 'time' the market, and you should make yourself familiar with those concepts before proceeding. If you are an average 'private person' investor, there are a few ways to make money from a crash, and here are 3 significant ones: You could ...


40

What should be taken into account that this isn't some random oil that one could take for a low price and store on a rented tanker or at some random storage. The particular contract that went negative was for delivery in Oklahoma through a pipe. The existing storages there are nearly full. Unless you have the means to build a storage facility you are ...


39

Not sure why @Brick's answer was voted down; let me try to state it more precisely. maker Type 1 (seller): You tell the exchange that you want to sell at price P, but P is higher than the highest price at which any Type 2 maker is currently willing to buy. (You're demanding too much money in the eyes of everyone who's said they want to buy.) Type 2 (buyer)...


36

They do so because it’s free advertising. If they get it wildly wrong, it will be totally forgotten —- it’s not news when a prediction fails to come to pass. Unfortunately, it is often considered news when prediction does come to pass, or even comes close. If it is at 3,850 they will be in the news (again) as being amazingly accurate. If it’s 2900 or ...


25

Currently only one company builds, maintains and operates these H2 Stations. Its the H2 MOBILITY Deutschland GmbH & Co. KG which in turn are six companies (Air Liquide, Daimler, Linde, OMV, Shell and TOTAL). So its not a law and more market dynamics as it is a monopoly.


25

Because what if nobody wants to buy at that price any more? When the buy price and the sale price meet, a transaction happens, and those prices are removed from the market. That means there's always a gap between the highest buy price and the lowest sell price. No more trading happens until someone decides to increase the buy price or decrease the sell price....


16

You seem to think that stock exchanges are much more than they actually are. But it's right there in the name: stock exchange. It's a place where people exchange (i.e. trade) stocks, no more and no less. All it does is enable the trading (and thereby price finding). Supposedly they went into mysterious bankruptcy then what will happen to the listed ...


16

For the simple answer version to your question - yes, a negative commodity price means the seller is willing to pay someone else to take a contract off their hands. This is a feature of commodities where storage, transportation, maintaining production, refining or carrying cost are a part of the equation. In the specific case in question, the interaction of ...


14

As you are asking specifically for Kraken, here is what I found: What is ​Maker vs Taker? A trade gets the ​taker​ fee if the trade order is matched immediately against an order already on the order book, which is ​removing liquidity​. A trade gets the ​maker​ fee if the trade order is not matched immediately against an order already on the ...


14

Just because one buyer was willing to pay $X doesn't necessarily mean other buyers will as well. Maybe that first buyer isn't interested in buying any more since he already has what he wants. If you don't mind waiting, potentially quite a long time, then you can feel free to leave your selling price at $X, or even increase it. But if you need the product ...


13

In simple terms, the value of a stock represents the total value of: Adding up the assets (the things it owns) Subtracting the liabilities (the things it owes) Adding the present value of all the predicted future income streams. Present value means that you look at all the future years' predicted income, and discount it to make up for the fact that you have ...


12

Besides the publicity angle, there's also the possibility that a company could use these predictions for more direct profit. Consider the following: Buy up lots of stock at $50/share Publish that you predict that stock will get to $70/share Wait for people following your advice to start pushing the stock price up Sell the stock when it gets to $70/share. (...


11

Stock A last traded at $100. Stock A has 1 million shares outstanding. Stock A's market cap is $100 million. No seller is willing to sell Stock A for less than $110 a share. One buyer is willing to buy 1 share for $110. The order executes. The buyer pays the seller $110. Stock A's new price is $110. Stock A's market cap is now $110 million. An $110 ...


11

For a trade to happen, there must be a buyer and a seller. The buyer could have placed an offer to buy, which the seller took. Or the seller could have placed an offer to sell, which the buyer took. These are the only two possibilities. If the buyer placed the offer which the seller later took, the buyer is the maker (he made liquidity available) and the ...


10

The scenario is a private person (as opposed to a professional in the banking system) who thinks/guesses that the market is going to crash in a short time. 'Short time' as in soon or as in drop very quickly? A stock market crash is a steep double-digit percentage stock market drop over a period of several days. It involves panic selling and an abrupt, ...


10

Is it a myth that the stock market is guaranteed to go up long-term? No, it is not a myth; it is a generalization. As you say, this is not intended to be taken literally, and nothing is guaranteed. If the argument is "the market always goes up long-term", then "in this particular short-term window it didn't go up" isn't really a valid ...


9

There are many exchanges (not only for cryptos) that use a "Maker-Taker" model. In this model: A taker is the party whose order tends to be filled on demand (i.e. does not has to wait). This part also tends to pay higher fees. A maker is the party whose order tends to stay in the market for some time, waiting for a counterpart (a taker) to complete the ...


8

Market makers make the spread on market orders, only. A market order is one in which the retail buyer/seller says fill the order immediately at whatever is the best price. The market maker is buying the market-sells at the bid and selling the market-buys at the ask. If the market-buy volume equals the market-sell volume then the market maker is just ...


8

There is no unique identifier that exists to identify specific shares of a stock. Just like money in the bank, there is no real reason to identify which exact dollar bills belong to me or you, so long as there is a record that I own X bills and I can access them when I want. (Of course, unlike banks, there is still a 1:1 relationship between the amount I ...


8

Others have made great explanations of the general theory behind maker/taker logic. However to answer the original question. If isBuyerMaker is true for the trade, it means that the order of whoever was on the buy side, was sitting as a bid in the orderbook for some time (so that it was making the market) and then someone came in and matched it immediately (...


8

You are right - nothing is "guaranteed". But if you look at every 10-year period of the S&P 500, there are only three 10-year periods since 1935 that had negative returns: 1929-1938 (recovery from the Great Depression), 1999-2008 and 2000-2009 (which included two crashes). Every other 10 year period (including periods that only had one crash ...


7

GENIX was started by Joel Greenblatt back in 2013, so it is a real life test of the strategy. GENIX got off to a great start in 2013 and 2014 (probably because investors were pumping money into the fund) but had a terrible 2015, and lagging in 2016. Since inception it has under-performed an S&P 500 index fund by about 1.90% per year. The expense ratio ...


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