Hmm, weird. I would expect more competition to lead to less favorable prices, in effect creating a seller's market. Likewise, I would expect buyers faced with high spreads to be less willing to pay (i.e., they would demand higher yields), since they know that they are likely to take a haircut when and if they sell. FYI, if you google "liquidity premium", the capsule summary is: "Liquidity premium is the extra yield built into the returns on an asset if it cannot be cashed in easily or quickly," which suggests that all else being equal, yield is normally higher on less liquid securities.

Is it an established fact that off the run bonds trade at a lower yield than on the run bonds? I would expect the liquidity premium to go in the other direction, with investors less willing to hold the less liquid bonds. You would expect that to drive prices down and therefore yields up.

Can you add an explanation of who absorbs the losses in the event that a trader's leveraged trade generates losses that exceed the "isolated margin"? Right now the description sounds too good to be true (who wouldn't want unlimited upside with a fixed limit on downside)? Also, you say that this concept is not inherently related to crypto. Are there examples of conventional (i.e., non-crypto) brokerages offering "isolated margin"? It seems many people around here have never heard the term; are there other synonymous terms that might be more widely known?

The future of the tobacco industry in the US and several other countries is very uncertain. Even now there are members of Congress calling for some of their more popular products to be banned. If that happens, they likely won't be able to sustain their dividend. That's why the yield is so high. It's not that the dividend is particularly large; it's that the stock price is depressed because of the uncertainty about their business. (Compare Eastman Kodak in the early 2000s, which also had a very attractive dividend yield).

You know what business Altria is in, right? Are you sure you want to bet your security in retirement on them continuing to be able to pay that dividend?

One minor quibble, the insurance company's ability to invest is not a secondary consideration; it's fundamental to the insurance business model. Warren Buffett covered this in detail in one of his annual letters (but sadly I don't remember which year). Basically, it is not necessary for an insurance operation to run an underwriting profit, so long as their underwriting losses are small enough for their investments to be profitable.

@JimmyJames Of course the dividend benefits existing shareholders. It's a mistake to think that you want your share prices to be as high as possible. What you want is for your investments to earn you as much as they can while tying up as little of your money as possible. When a company pays you a dividend it reduces the amount you have invested while still giving you the same future earnings. IOW, a stock's price is partly due to the value of its future earnings and partly due to the value of its assets. You want the former to be high, but you want the latter to be as low as possible.

If you're still not convinced, try this thought experiment: say you propose to invest in my company FooCorp, and I tell you that I can either take all of your money and put it to work earing X% return selling widgets, or I can take half of your money and put it to work earning the same X%, and I'll put the other half in a savings account earning little to nothing. Which plan is more attractive? Keep in mind that if you wanted to put your money in a savings account, you could have done that without my help.

@JimmyJames Issuing a dividend is not using capital at all; it is returning that capital to investors so that they can put it to whatever use they see fit. The idea is that if a company doesn't have a use for those assets, it shouldn't hold on to them. Capital is being used "more efficiently" because the company is using less capital to achieve the same results.

@JimmyJames as an investor, you want the company to avoid holding unproductive assets on its balance sheet. Returning cash to investors if you don't have a better use for it reduces the stock price, but existing investors are no worse off because they receive the cash from the dividend. The corresponding increase in return on equity is indicative of a company using capital more efficiently.

Exactly. Stripped of the math, when a company keeps a lot of cash on the books (and they have no investment use for it), they are making their investors take their equity investment with a side-order of cash, and that depresses returns. Often investors don't want that; they want their stocks al-la-carte, so to speak.

@user253751 No, goodwill is the difference between the price a company paid for another company that it bought, and the book value of the purchased company. Goodwill is counted as an (intangible) asset of the acquiring company, not part of its equity. It's kind of a weird accounting convention, and a lot of analysts ignore it. Either way, it doesn't have anything to with the stock price of the acquiring company (i.e., the one that holds the goodwill on its balance sheet).

The first part of this answer is good, but the last paragraph just muddies the waters by confusing equity with market cap. A company's equity has nothing to do with what investors think. Its stock price may be affected by investors' opinions, but a company's own stock is not part of its assets.

It might amuse you to learn that there is at least one documented case of a sports book being used to hedge a business risk. Specifically, the owner of a Houston mattress store ran a promotion offering to refund customers' purchases if the Astros won the world series. He insured against the costs of paying off the promotion by betting on the Astros in casino sports books. Story here: npr.org/sections/money/2020/10/27/885197276/…