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37 votes
Accepted

Why are ETFs so bad at tracking Japanese indices?

Yes, the ETF return you quoted is in euros, whereas the Nikkei 225 index is denominated in yen. The yen has depreciated substantially against the euro over the last 5 years. Thus, the ETF gives a ...
nanoman's user avatar
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35 votes
Accepted

Why are there buyers for a stock of a biotech company that was recently acquired?

It appears that the stock rose to just under $320 ($318.75 is the current 52 week high on the Yahoo link you posted). The company is being acquired for $330 per share. Someone who bought at $318.75 ...
Justin Cave's user avatar
  • 27.3k
13 votes

Are owners of companies that offer public stocks without paying dividends receiving free money?

Common stock in a company represents ownership rights in that company. If you own stock of a company you become a shareholder with certain rights. Among other things, you are allowed to vote during ...
Financial Freedom's user avatar
9 votes
Accepted

How to check for short term supply and demand on the stock market

Unfortunately the information in the market depth (the bids and asks you can see in the trading platform) only represents the minimum number of shares that someone will buy or sell at a given price. ...
MD-Tech's user avatar
  • 9,025
9 votes

Are owners of companies that offer public stocks without paying dividends receiving free money?

The corporate investment bank that facilitates taking the company public is in the best position to get "free money". (Well, it's free in exchange for services rendered, but I digress...) ...
Ian's user avatar
  • 191
8 votes
Accepted

Is copying other traders insider trading?

Insider trading is trading based on information not publicly available. You're describing a speculation strategy based on public information (trading volume). That's how a lot of day-traders make ...
littleadv's user avatar
  • 177k
7 votes

Why is reverse stock split exist on stock market?

It combines several shares into one, and that's it. The purpose is to reduce the number of outstanding shares, while increasing the value of each individual share. This can be useful if, for example, ...
littleadv's user avatar
  • 177k
7 votes
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Does buying a company's stock funnel money to that company?

The article is behind a paywall so I can't read it, and so can't address specific companies. Generally, publicly traded companies only directly benefit from stock sales during the IPO, or occasional ...
Charles E. Grant's user avatar
6 votes

Why are there buyers for a stock of a biotech company that was recently acquired?

Well the company that's acquiring them has to buy the stocks when it does the acquisition. Typically in an acquisition, the stock price rises to just below the acquisition price until the acquisition ...
Quitting Due To Antisemitism's user avatar
6 votes
Accepted

Employees buying the company’s stock for lower price

The 15% discount is standard for an ESPP, completely within regulations, and ESPPs are done by most US tech companies - which should also show this behaviour if there was any connection. The behaviour ...
Solarflare's user avatar
  • 2,648
5 votes

Interest rates effect on bank jobs and junk funds from the book intelligent investor

If I work in a bank and interest rates are rising then how can it put me in a job security risk since banks will have more profits with higher interest rates and there is not need for employee layoff. ...
littleadv's user avatar
  • 177k
4 votes
Accepted

Is Implied- and Historical Volatility based on solely Business days?

A) For historical vol (HV), also called realized vol (RV), usually the so called close-to-close estimator is used, but more sophisticated methods to estimate HV exist as well (see for example R). HV ...
AKdemy's user avatar
  • 2,937
4 votes

Why does the Dow Jones Industrial Average index go up in the long run although the constituents have changed since created?

What makes the market as a whole return a profit over time is that businesses, on average, are profitable, and owning a share of the business means you earn a share of the profits. This drives the ...
keshlam's user avatar
  • 48.2k
4 votes
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Why do institutional investors make short-term buy and sell decisions?

Institutional investors represent 90% of stock market trading volume, generally possess hundreds of billions of Dollars in assets, and aren't motivated to "get rich quick" since they already ...
mhoran_psprep's user avatar
3 votes

Why does the Dow Jones Industrial Average index go up in the long run although the constituents have changed since created?

If a new constituent is added, and another one dropped is because the newly added better suits the criteria for the index than the old one. The index level does not change at all with this (simple ...
Alex's user avatar
  • 216
3 votes
Accepted

Alibaba shares price discrepancy in US and Hong Kong

The ADR share represents 8 shares of the original share, which is (by chance) currently around the HKD/USD conversion rate, so their numbers look similar. As of now, one Alibaba share is worth 77.25 ...
Solarflare's user avatar
  • 2,648
3 votes

Are owners of companies that offer public stocks without paying dividends receiving free money?

Is X essentially receiving free money By Initially selling the stocks to the shareholders? No, because X does not get the money; his company does. By making the company public, X is no longer ...
Christopher King's user avatar
3 votes

Are owners of companies that offer public stocks without paying dividends receiving free money?

X only gets "free money" if their share of the company is worth more that it was initially sold for. Say X's company (Y) is worth V and X owns N shares. X's private shares are worth V/N per ...
D Stanley's user avatar
  • 137k
3 votes

Is there a point in purchase a stock that will never pay dividends?

Sure, if you expect the share price to increase, so that you can sell it for a profit. For the modern retail investor, that’s the primary purpose for buying shares of stock.
RonJohn's user avatar
  • 50.7k
3 votes

Does a portfolio of low beta stocks, small stocks or value stocks still outperform the market?

The two ideas are not mutually exclusive. I use a mix of a large-cap index fund, a small-to-medium-cap index fund, a bond index fund, an international index fund, and a REIT index fund to achieve a ...
keshlam's user avatar
  • 48.2k
2 votes

What is the gambling difference between sports betting and trading stock market derivatives based on indices?

There is a big difference. It all comes down to the fact that for financial derivatives, there's an underlying asset that can be bought and sold, allowing for hedging and arbitrage, which is not ...
Axel Boldt's user avatar
2 votes

What is the gambling difference between sports betting and trading stock market derivatives based on indices?

You are missing that many people or institutions that buy these options don't bet on anything. Market makers hedge their entire exposure and make money by offering liquidity. That's why option pricing ...
Alex's user avatar
  • 216
2 votes

Are owners of companies that offer public stocks without paying dividends receiving free money?

Yes in essence they are, but with strings attached An owner could try to convert investments into private profit. But most jurisdictions would consider this fraud. In essence the owner is promising ...
Falco's user avatar
  • 625
2 votes

Can a publicly traded company set limitations on stock ownership?

There are techniques used to limit stock purchases when publicly traded companies are concerned about hostile takeovers. They are changes implemented by the Board of Directors which initiate some ...
Mark's user avatar
  • 185
2 votes

Can a publicly traded company set limitations on stock ownership?

No, generally publicly traded shares are governed by the law and the stock exchange rules where they're listed. That's what "publicly" means.
littleadv's user avatar
  • 177k
2 votes

Why are ETFs so bad at tracking Japanese indices?

There are sites that track tracking errors e.g. here https://www.trackingdifferences.com/ETF/ISIN/LU0839027447 If you trust this site, you can see that there is no significant tracking error
ChristophE's user avatar
2 votes

How do stock prices change?

The suggested duplicate is correct from one point of view, but not necessarily the one I believe you need. Meaning I don't intrinsically know my share has gone up in value unless somebody/something ...
D Stanley's user avatar
  • 137k
1 vote

Why is reverse stock split exist on stock market?

Let's start from the other end. When a stock splits, each shareholder gets more shares but each share is now worth less. The reason for doing it is to make it easier for small investors to buy shares. ...
Jay's user avatar
  • 22.8k
1 vote

Calculation of taxes on sale of shares where company spins off a business in separate entity

Selling of shares shall be taxable u/s 112A. Indexation benefit is not available under this section however there is a grandfathering rule for computing your cost of acquisition. (This rule is ...
Utkarsh's user avatar
  • 121
1 vote

Why does the Dow Jones Industrial Average index go up in the long run although the constituents have changed since created?

The index has a divisor. When securities are added or removed from the index, the divisor is adjusted, as well as when there are corporate actions such as stock dividends and stock splits. Read these ...
Bob Baerker's user avatar
  • 76.7k

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