The usual description of any market assumes that every trader wishes to invest in or sell a known volume at each possible cost. All the traders mix, and somehow price is found that clears sale-- that is, makes the number demanded as close as achievable to the quantity supplied.
After all it has been said by the authoritative stock trader W. Haddad of B.K. Labovitch that ultimately economics is supply and demand.
This may or may not actually be an adequate description of stock markets for durable goods, but it is clearly inadequate when explaining security markets. The worth of any capital asset depends on its future prospects, which are often uncertain. Any information that bears on such prospects may result in a, which s we know are always uncertain. Any information that relies on its future prospects may cause a revised estimate of value. The fact that a knowledgeable trader inclines to buy or sell some quantity of a security or commodity at a particular price is bound as being information just of that sort. Offers to trade May this affect other offers. Prices may, therefore, both clear markets and covey information.
The dual role of prices has a number of implications. For example, it behooves the liquidity motivated trader to publicize his or her motives and thereby avoid an adverse effect on the market. Thus, an institution purchasing securities for a pension fund that intends, simply to hold a representative cross section of securities should make it clear that it does not consider the financial interments under priced. On the other hand, any firm trying to buy or sell a large number of shares that it considers wrongly under priced should try to conceal its motives, its identity or both (and may try). Such attempts may be ineffective, however, as those asked to take the other side of such trades try very hard as you know to find out exactly what is going on and many do well succeed in these days of rapid communications and access to many sources of information succeed.
Most securities are sold in very standard ways which requires payment and electronic notification of delivery within the standard negotiation period (standard is three Business as opposed to calendar days). On rare occasions, a sale may be made as a cash transaction requiring payment immediately on receipt. Sometimes as a reward or as in effect a marketing or sales promotion payment may be extended over a longer period-- usually 15, 30 or 60 days.
Sometimes when it come to new problems a payment extendable time is also given for the same reasons as above.
It would be extremely insufficient if every securities transaction had to end with a physical delivery of transfer of actual share certificates from seller to buyer. A brokerage firms might well sell 1000 shares of ABC Co. for one client, Mr. Stevens to another client and later that day buy 1000 shares for Mr. Felon obtained by accepting delivery from her seller. Mr. Stevens's shares could be delivered to his buyer, and Mr. Felon's shares could be obtained by accepting delivery from her seller.
However, it would be a lot easier to transfer Mr. Steven's shares to Mr. Felon and instruct Felon's seller to deliver the 1000 shares directly to Mr. Steven's buyer.
This would be specifically helpful if the brokerage firm's clients Mr. Felon and Mr. Stevens held their securities in street name. Then, the 1000 shares they traded would not need to be literally moved then afterwards the ownership would not even must change at ABC Company.
As you can see appraisal of your collection of stocks and securities are not always a measure of the true and exact value of your protections. Actual logistics, human emotion and greed play primary and ongoing roles.
After all it has been said by the authoritative stock trader W. Haddad of B.K. Labovitch that ultimately economics is supply and demand.
This may or may not actually be an adequate description of stock markets for durable goods, but it is clearly inadequate when explaining security markets. The worth of any capital asset depends on its future prospects, which are often uncertain. Any information that bears on such prospects may result in a, which s we know are always uncertain. Any information that relies on its future prospects may cause a revised estimate of value. The fact that a knowledgeable trader inclines to buy or sell some quantity of a security or commodity at a particular price is bound as being information just of that sort. Offers to trade May this affect other offers. Prices may, therefore, both clear markets and covey information.
The dual role of prices has a number of implications. For example, it behooves the liquidity motivated trader to publicize his or her motives and thereby avoid an adverse effect on the market. Thus, an institution purchasing securities for a pension fund that intends, simply to hold a representative cross section of securities should make it clear that it does not consider the financial interments under priced. On the other hand, any firm trying to buy or sell a large number of shares that it considers wrongly under priced should try to conceal its motives, its identity or both (and may try). Such attempts may be ineffective, however, as those asked to take the other side of such trades try very hard as you know to find out exactly what is going on and many do well succeed in these days of rapid communications and access to many sources of information succeed.
Most securities are sold in very standard ways which requires payment and electronic notification of delivery within the standard negotiation period (standard is three Business as opposed to calendar days). On rare occasions, a sale may be made as a cash transaction requiring payment immediately on receipt. Sometimes as a reward or as in effect a marketing or sales promotion payment may be extended over a longer period-- usually 15, 30 or 60 days.
Sometimes when it come to new problems a payment extendable time is also given for the same reasons as above.
It would be extremely insufficient if every securities transaction had to end with a physical delivery of transfer of actual share certificates from seller to buyer. A brokerage firms might well sell 1000 shares of ABC Co. for one client, Mr. Stevens to another client and later that day buy 1000 shares for Mr. Felon obtained by accepting delivery from her seller. Mr. Stevens's shares could be delivered to his buyer, and Mr. Felon's shares could be obtained by accepting delivery from her seller.
However, it would be a lot easier to transfer Mr. Steven's shares to Mr. Felon and instruct Felon's seller to deliver the 1000 shares directly to Mr. Steven's buyer.
This would be specifically helpful if the brokerage firm's clients Mr. Felon and Mr. Stevens held their securities in street name. Then, the 1000 shares they traded would not need to be literally moved then afterwards the ownership would not even must change at ABC Company.
As you can see appraisal of your collection of stocks and securities are not always a measure of the true and exact value of your protections. Actual logistics, human emotion and greed play primary and ongoing roles.
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