Questions tagged [stock-market]

Markets in which ownership stakes of firms (e.g. stocks/shares) can be traded.

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1answer
27 views

Why would using real-time settlements have helped combat some of the chaos that occurred during the January 2021 GameStop saga?

I read on cnbc.com (mirror): Tenev also advocated for real-time settlement instead of two-day settlement in order to help combat some of the chaos that occurred during the GameStop saga. Why would ...
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Are financial markets “unique” for each “currency pair”, or are they simply “translated”?

This is something I've been long wondering about. Let's say that I have statistics showing the daily closing Bitcoin price in USD since early 2009. Great. Now, if I wanted to get the daily closing ...
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71 views

What happened when the money from share issuance is spent?

Let's assume that new bank is incorporated and it issued 100 000 shares with nominal value odf $100. Let's also assume that all shares are sold for the same price, so bank now has 10 million dollars. ...
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14 views

Why does US equities valuation have the downward pressure on USD?

While making readings on economics I came across a sentence: ..large valuation gap that has opened up between US equities and the rest of the world. This could help bid up non-US equity valuations and ...
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Buying and selling in the stock market

I am a total beginner to this, but from the few online videos about how (practical) trading works, I understand that when buyers dominate the market the prices go up and when sellers dominate the ...
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How can anyone possibly predict how the price of anything (stocks, Bitcoin, fiat, etc.) will change without “insider knowledge”?

Other than the fact that all centralized (and thus "quick") exchanges require KYC/AML nonsense, making it impossible for me to have an account there, I've never dared to even try once to &...
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Buying real gold vs buying a stock that tracks the price of gold? [migrated]

I want to invest in gold. I have two options: On an exchange like etoro, I can buy shares of a stock that tracks the price of gold. Or I can literally buy a gold bar. What's the better option? The ...
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Does it make sense to issue several shares for a single company?

I have written a crypto software that distributes (donated) funds to scientists and other common good producers. (I will call all of them "scientists" for simplicity.) Each scientist ...
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1answer
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Where do stocks get their value from? [duplicate]

I'm aware that some companies give out dividends to their shareholders, but are there companies that don't? And if they don't, what incentivizes people to buy stocks at the IPO? Is it simply the ...
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2answers
64 views

Are equity prices and stock prices the same?

Do we use in common language "equity price" as a synonym to "stock price"?
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Why do stocks that don’t pay any dividends change price when the company does better?

I don’t understand why (non-dividend paying) stocks increase in price when a company is successful; is it just because everyone expects that everyone else will find it more valuable because the ...
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Do stock prices really tend towards a fair valuation? [migrated]

I recently started working myself into the concepts of valuation. While I find the concept of fair value very interesting and intuitive, I wonder if prices are actually empirically driven by value in ...
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1answer
43 views

Is it possible to peg a cryptocurrency to a stock or bond index?

What if the creators of a new cryptocurrency gave out new units of the cryptocurrency in exchange for shares of a stock or bond index fund, held these shares in reserves, and allowed owners of the ...
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1answer
50 views

Cointegration in stock market between different market places

Hi guys im interested in cointegration in stock market between Brazil, USA, London, China, India, Argentina and Hong Kong. Since I want to compare each country’s index to the BR index, how do i do to ...
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4answers
75 views

Why do people think a stock should have a certain price based on the company's revenue?

Stock investment comes part and parcel with discussions about quarterly earnings, P/E ratios, and a host of other considerations designed to measure the "intrinsic value" of a stock and ...
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Why did the French not invest much in the stock market prior to 1990?

https://fr.wikipedia.org/wiki/Plan_d%27%C3%A9pargne_en_actions says: Le PEA a été créé en 1992 afin d'encourager l'investissement en bourse des particuliers, notoirement bas en France. Google ...
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How does the fed pump the stock market [closed]

I've been hearing a lot about the fed "pumping the stock market" with trillions of dollars to maintain prices. I know the fed isn't allowed to actually buy stocks so how is this money being ...
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What is the intuition for the potential loss of market makers on LS-LSMR?

What risk do liquidity providers take on when they provide liquidity to an LS-LSMR automated market maker pool? How much can they lose?
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1answer
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How do stock index futures help an economy?

It seems that stock index futures affect economic growth, but I don't know how they work. Please can someone explain? Thanks in advance~
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1answer
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Why doesn't stock market help to boost the economic growth directly?

For example, during the recession, the central bank often goes to buy financial instruments that are riskier than government bonds (such as corporate bonds)- which is called "quantitative easing&...
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Does treasury pay interest+ face value to the fed?

heard all the profit that the fed makes goes into treasury.. does that mean the treasury department can make unlimited money buy selling bonds to the fed? like if they issue bond to people, and the ...
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3answers
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If North American stock markets are semi-strong efficient, why are indices like S&P500 expected to grow?

I'm narrowing this question on Reddit's r/investing to North America. But don't hesitate to discuss other Five Eyes (FVEY) – Australia, Canada, New Zealand, UK, US. I'm posting here because I ...
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Adjusted SHARE Price and Return calculation

I hope my queries makes sense as I am pretty new to business finance (not sure if it's appropriate to post here). To be honest, this query is related to the assignment from my school which I need to ...
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How does fed cutting federal fund rate affect student loan

If fed cuts rate, it means it's cutting federal fund rate right? then why do loans like credit card and stuend loan? those aren't like Mortgage rate which the fed cuts its rate by buying MBS
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How can the stock market keep growing indefinitely?

It sounds like a dumb question, but there is only so much money in the world. Assets can grow, but money can only be printed. So if there is 400 trillion dollars worth of money in the world, and the ...
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1answer
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mortgage rate in 2008 [closed]

if banks and finanfial entity paniced, which cause people to stop lending which leads to higher interest rate, how did the mortage rate stayed the same in 2008? it barely dropped. It's kind of ...
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1answer
52 views

Bankruptcy Vs default

If a company files for bankruptcy, how come its stock still trades ? E.g. On June 17, Wirecard was valued at more than $14 billion. Eight days later, it filed for the German equivalent of bankruptcy. ...
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1answer
35 views

What does it mean, 'Higher interest rates attract FIIs and FPIs'?

What would interest rates have anything to do with shares? When we say a higher interest rate attracts FII/FPI, does it not mean it is investing in shares of a company? For example, how does it help a ...
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1answer
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Why haven't ARK's ETFs with 0.75% MERs been mimicked?

I surmise that fully duplicating ARK INVEST's ETFs may violate intellectual property law, so I utilise 'mimick' instead. ARK's website exhibits each of their ETFs' portfolios. So why haven't other ...
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1answer
48 views

Why does borrowability of shares inversely correlate with probability of assignment or exercise?

I transcribe 5:26 of this video. I don't know that YouTuber's credentials. So looking back here, what could possibly cause you to get assigned early? If we look right here, AMD shares are listed as ...
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3answers
1k views

What is the mechanism that triggers a stock price change?

When discussing with my son basic economics (how the price is driven by demand, among others), I came to wonder which exact mechanism triggers a price change in a stock exchange. In everyday life, ...
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1answer
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Books and resources on how policies/regulations are made on exchanges like NYSE, NASDAQ, LSE, etc?

Different stock exchanges (for example, NYSE vs KRX) have similar but different regulations overall. Each exchange has different concerns and each exchange has a different approach to handle problems ...
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1answer
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Efficient market hypothesis and different performances between countries

When comparing historical gains (I used the "adjusted close" data on yahoo) of major indices in different countries it is clear that the US outperformed most of these by quite a bit (see for ...
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1answer
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Why is a “reverse IPO” named as such?

Recently, there has been a lot of hype over a group of companies called "special purpose acquisition companies" (SPACs). SPACs are "shell companies" or "blank check companies&...
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1answer
66 views

If you short an ETF, who pays its MER?

I don't understand how u/Cruian's comment answers the original questions in that Reddit post. The expense ratios are taken from the fund's holdings directly, you never see the change in your account ...
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1answer
373 views

Event Study vs. Difference-in-Differences

I am trying to perform Event Study methodology to analyse impact of group of events on group of stocks from certain sector. I noticed that I am getting surprisingly lot of positive results (very low p-...
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2answers
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What are the pros and cons of a “long stock, short call” position compared to a “short put”?

The profit-loss diagram for the "long stock, short call" position and the "short put" position are almost exactly the same, except that for the former, you may be able to profit ...
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1answer
184 views

What happens to the stock market if no one wants to buy?

When the stock market crashes, if everyone wants to sell, who will buy? Is it possible that no one could sell his shares because no one wants to buy them? If so, what would happen? Would share price ...
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1answer
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Why isn't the NYSE Composite mentioned as much as the Dow, S&P 500, or NASDAQ?

I happened upon this question at r/investing upon which this post is predicated, but I don't understand the answers there. I don't quote the OP verbatim for I emend his/her punctuation. The Dow [DJI], ...
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What's a more accurate term than 'share price' that doesn't depend on (reverse) stock splits?

Purport that retail investors desire to invest in AAPL or TSLA (both have been reported to split their stock soon), because they think their "future share price" (after the stock split) will ...
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How is the cost of equity for a specific stock calculated using the Fama-French 5 factor model?

The Fama-French 5 factor model is as follows: $$R_a = R_f + \beta_m \left( R_m - R_f\right) + \beta_s\text{SMB} + \beta_v\text{HML} + \beta_p\text{RMW} + + \beta_i\text{CMA}$$ It is quite easy to find ...
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1answer
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How much real value has the stock market lost since Feb. 2020?

In this question I'm using the Vanguard Total Stock Market Index Fund(VTSMIF), which for my purposes I find to be a sufficient indicator of the US market as a whole. (Please explain why this isn't an ...
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1answer
38 views

Has anyone peer-review researched investors buying another, but similarly spelled, ticker?

GLDD - Believing Robinhood users are dumb is profitable... : wallstreetbets Academics need to research the correlation between performing tickers and their closely related (only in name) cousins. ...
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Book Value per Common Share

Does book value per common share include intangible assets? As far as I know, its formula is common stockholder's equity divided by shares outstanding? If shareholder's equity includes intangible ...
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1answer
59 views

How does the Fed's stimulus push stocks markets higher?

I read that the Fed’s stimulus last March has contributed to a spectacular rally in stock markets. And indeed S&P500 has increased a lot since March. But how does the mechanism work? How does the ...
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1answer
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Why is a company allowed to change the number of shares it’s divided into after its IPO?

I read that even after an IPO, a company can change the number of shares that it’s divided into based on a board vote. What’s to prevent them from arbitrarily increasing the number of shares to raise ...
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How exactly does a stock price gap overnight?

I read Bob Baerker's answer. I'll exemplify with KODK. The NYSE has Extended Hours: 4:00 pm to 8:00 p.m. ET Opening Session: 4:00 a.m. to 9:30 a.m. ET Pretend that on July 28 2020, KODK last ...
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1answer
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Why aren't lengthier expirations offered, especially when a competitor offers it?

My grandparents in Canada screenshot from their Questrade IQ Edge. Why wouldn't the options exchange sell options with lengthier expiration dates for Vanguard's Russell 2000 ETF, when they do for ...
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1answer
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In March 2020, why did stock indices of Asian countries that curbed COVID19 still plummet?

By March 1 2020, both HK and Japan restrained and quelled COVID19, compared to France, USA, UK. Don't hesitate to discuss other countries unscathed by COVID-19.
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What's the economic argument (if any) for taxing dividends as ordinary income?

My (limited) understanding is that dividends and share repurchases are economically very similar: while share repurchases are slightly less direct, both transactions are effectively ways for publicly ...

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