Posts Tagged ‘stock exchanges’

Dark Pools and Adverse Selection

Dark Pools and Adverse Selection

Courtesy of Tim at The Psy-Fi Blog 

15th December 1883:  Two highwaymen force a group of travellers to hand over their valuables on the King's Highway. Original Artwork: After Dadd. Original Publication: Illustrated London News - The King's Highway - pub. 1883  (Photo by HultonArchive/Illustrated London News/Getty Images)

Friendly Highwaymen

Scientists believe that a great deal of the universe is in hiding, being made up of dark matter which, rather inconveniently, refuses to interact with anything else and is therefore almost undetectable. In a similar fashion many stockmarket trades are now being carried out in so called dark pools, where they’re supposed to be similarly undetectable. Unfortunately, despite what many users of them think, you don’t need to construct a super-collider to detect trades in dark pools.

These dark pools are one way for investors to move large blocks of stock without alerting others to what they’re doing. They’re anonymous trades of indeterminate volume carried out in murky corners of the securities industry. As usual the industry argues that it’s doing investors a favour. That’s “favour” in the same way that a highwayman saved his victims from having to carry heavy bags of money about.

Off Market Mechanisms

Now you might think that the very act of trading large volumes without moving the market is a somewhat dubious practice given that the very idea of a market is to ensure transparency through price discovery. However markets don’t so much frown on this practice as positively welcome it. Yet even though dark pools, where private investors are excluded, are expanding rapidly they’re not quite so dark as many users imagine.

In essence dark pools are trading platforms which circumvent the normal stock exchanges. Everything happens off-market and everyone goes to great trouble to avoid publishing trading volumes – it’s not possible to know in real-time, and sometimes not ever, how much stock is being traded (although most trades are published after the event). The rationale behind this is for participants is to stop prices moving against them. Typically, in an open market if you attempt to buy or sell a large block of shares then the price will move up or down in response to this. Much effort is devoted to trying to prevent this happening, dark pools being only one method.

Price Setting on the Dark Side

However, if you don’t have open market price setting there’s got to be some other way of figuring out how to price a trade. Neatly dark pools parasitize open markets by using the mid-price of openly traded stocks. In theory this means that dark…
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Stay Safe, Vince Fernando

Stay Safe, Vince Fernando

Courtesy of The Reformed Broker, Joshua M. Brown 

Clusterstock has its first embedded reporter and he is currently keeping us posted on the riotous protests in Thailand.

Vince Fernando, one of the better bloggers at The Business Insider, is keeping us updated on the explosive situation in real-time.

Having drinks with Joe Weisenthal a couple of weeks back I was amazed to hear about Vince’s insights into the protests.  In retrospect, these were the early rumblings of what has now turned into a full-blown riot, complete with burning stock exchanges and shopping malls.

Here are some of Vince Fernando’s missives from Bangkok.  Stay safe, Vince.

Thai Army ‘Live Fire’ Slaughter Zone

All Hell Breaking Loose, Stock Exchange On Fire

Shocking Pictures of the Last Six Hours  (yes, of course there’s a slideshow, it’s Clusterstock) 

 


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Phil's Favorites

Did negative-yielding debt peak?

 

Did negative-yielding debt peak?

Courtesy of 

My Chart o’ the Day comes from LPL Research chief strategist John Lynch and it looks at the phenomenon of negative-yielding debt. Lynch notes that “Unfortunately, the global search for yield has now morphed into a scenario in which fixed income investors, or lenders, attempt to ‘potentially lose less’ rather than ‘earn slightly more’ than the value of the loan extended.”

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Zero Hedge

Despite Central Bank Cuts, UK Credit Card Rates Hit Highest Levels In 13 Years

Courtesy of ZeroHedge View original post here.

Credit card interest rates in the UK have hit the highest level in 13 years, according to the Financial Times

Per the report, the average annual percentage rate (APR) reached 24.7% in September - the highest since financial website Moneyfacts.co.uk began recording data. The average APR was 23.4% this time last year. 

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The Technical Traders

SAFE ASSETS - A TRADING STRATEGY FOR UTILITIES, GOLD, AND BONDS

Courtesy of Technical Traders

Chris Vermeulen, Founder of The Technical Traders shares his trading strategy for safer assets. While precious metals and bonds had a great run, the charts are showing the utilities could be the place to be in the short term. It’s important to note we are not saying the other safe havens are going to crash but it’s all about the time frame and playing the sector that could pop first.

LISTEN HERE NOW

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Kimble Charting Solutions

Stocks, Oil, and Bond Yields At Critical Bullish Breakout Tests!

Courtesy of Chris Kimble

It’s not often that three asset classes reach similar important trading points all at once.

But that’s exactly what’s happening right now with stocks, crude oil, and treasury bond yields.

And this is occurring on Federal Reserve day no less! Something has got to give.

In the chart above y...



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Insider Scoop

Economic Data Scheduled For Wednesday

Courtesy of Benzinga

  • The MBA's index of mortgage application activity for the latest week is schedule for release at 7:00 a.m. ET.
  • Data on housing starts and permits for August will be released at 8:30 a.m. ET.
  • The Energy Information Administration’s weekly report on petroleum inventories in the U.S. is schedule for release at 10:30 a.m. ET.
  • The Federal Open Market Committee will announce its policy decision at 2:00 p.m. ET.
  • The Fed Chairman Jerome Powell will hold a press conference at 2:30 p.m. ET.

Posted-In: Economic Data...



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Lee's Free Thinking

Is The Drone Strike a Black Swan?

Courtesy of Lee Adler

Pundits are calling yesterday’s drone strke a “black swan.” Can a drone strike on a Saudi oil facility, be a “black swan.”

According to Investopedia:

A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, their severe impact, and the practice of explaining widespread failure to predict them as simple folly in hindsight.

I seriously doubt that no one expected or could have predicted a drone strike on a Saudi oil facility.

Call Me A B...

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Chart School

Crude Oil Cycle Bottom aligns with Saudi Oil Attack

Courtesy of Read the Ticker

Do the cycles know? Funny how cycle lows attract the need for higher prices, no matter what the news is!

These are the questions before markets on on Monday 16th Aug 2019:

1) A much higher oil price in quick time can not be tolerated by the consumer, as it gives birth to much higher inflation and a tax on the average Joe disposable income. This is recessionary pressure.

2) With (1) above the real issue will be the higher interest rate and US dollar effect on the SP500 near all time highs.

3) A moderately higher oil price is likely to be absorbed and be bullish as it creates income for struggling energy companies and the inflation shock may be muted. 

We shall see. 

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Digital Currencies

China Crypto Miners Wiped Out By Flood; Bitcoin Hash Rate Hits ATHs

Courtesy of ZeroHedge View original post here.

Last week, a devastating rainstorm in China's Sichuan province triggered mudslides, forcing local hydropower plants and cryptocurrency miners to halt operations, reported CoinDesk.

Torrential rains flooded some parts of Sichuan's mountainous Aba prefecture last Monday, with mudslides seen across 17 counties in the area, according to local government posts on Weibo. 

One of the worst-hit areas was Wenchuan county, ...



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Biotech

The Big Pharma Takeover of Medical Cannabis

Reminder: We are available to chat with Members, comments are found below each post.

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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