Hot answers tagged

101

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 have to have the means to transport and ...


90

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 ...


60

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 ...


59

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 ...


38

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)...


38

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 ...


36

No one can tell what will or will not be a good investment in the future. However -- Berkshire Hathaway's annual newsletter to shareholders has, for the past several years, discussed this. Warren Buffett is 89, and his right-hand-man Charlie Munger is 96. They know they're not getting any younger and they're not going to live forever. They have been making ...


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

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 ...


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 ...


9

I'd add, this is actually the way any stock opens every day, i.e. the closing price of the prior day is what it is, but the opening price will reflect whatever news there was prior to the day's open. If you watch the business news, you'll often see that some stock has an order imbalance and has not opened yet, at the normal time. So, as Geo stated, those who ...


7

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 ...


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 ...


7

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 ...


7

Go to a large reference library and ask to see the Wall Street Journal for October 13 1992.


7

You need to hope that a fund exists targeting the particular market segment you are interested in. For example, searching for "cloud computing ETF" throws up one result. You'd then need to read all the details of how it invests to figure out if that really matches up with what you want - there'll always be various trade-offs the fund manager has to make. ...


7

No, you shouldn't wait for a crash. What if the crash doesn't come? What if the stocks you're interested in aren't specifically affected by a crash? What if what's considered a crash by others doesn't meet your criteria and you miss out? If it was that simple a concept, why doesn't everyone wait for a crash and then buy? How is your money being invested and ...


7

Most certainly there are such a thing as dual-listed or interlisted stocks. These are often exactly the same class of stock, but quoted on more than one exchange — and sometimes even in a different currency. Arbitrageurs can sometimes take advantage of differences in quotes and exchange rates. Here's list of Canadian Interlisted Companies including "...


6

In an IPO (initial public offering) or APO (additional public offering) situation, a small group of stakeholders (as few as one) basically decide to offer an additional number of "shares" of equity in the company. Usually, these "shares" are all equal; if you own one share you own a percentage of the company equal to that of anyone else who owns one share. ...


6

At the most fundamental level, every market is comprised of buyers and selling trading securities. These buyers and sellers decide what and how to trade based on the probability of future events, as they see it. That's a simple statement, but an example demonstrates how complicated it can be. Picture a company that's about to announce earnings. Some ...


6

In order for a commodity to be offered as a future, the exact specifications must be specified by the exchange. This includes not only the particular grade, strain, etc (depending on what we are talking about) but also the exact delivery location (otherwise transportation costs is an issue as you noticed). Once there is a standardized contract, the ...


6

Who are the losers going to be? If you can tell me for certain which firms will do worst in a bear market and can time it so that this information is not already priced into the market then you can make money. If not don't try. In a bull market stocks tend to act "normally" with established patterns such as correlations acting as expected and stocks more or ...


6

As of this moment the DOW 30 is up 6.92% Year-to-date. Of the 30 stocks in the index 6 are in negative territory for the year. And of the 6 in negative territory 3 are farther below 0 than the average is above 0. The investors in those 3 stocks (Boeing, Goldman Sachs and Nike) would look at this year so far as a disaster. Individual stocks can move in ...


6

Who has the power to do that? It depends on the currency pair since it is much harder to move a liquid market like Fiber (EURUSD) or Cable (GBPUSD) than it is to move illiquid markets such as USDTRY, however, it will mostly be big banks and big hedge funds adjusting their positions or speculating (not just on the currency or market making but also ...


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