Questions tagged [stock-market]

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

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1answer
33 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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Trailing Stop Loss on STC CFD

I'm using XTB Demo platform to learn about stocks. I have found last time a great tool to keep my earnings safe. It's Trailing Stop Loss. In this platform I can set up Trailing Stop Loss for crypto, ...
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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
25 views

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
44 views

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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2answers
28 views

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
91 views

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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0answers
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Crypto Exchange - Ask/Bid prices

I'm looking at a graph here for a digit asset (ethereum) How is the price of this asset actually determined? I see that there's an ask/bid price, but I don't really get it: Who exactly is asking/...
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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
41 views

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
31 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
47 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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20 views

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
30 views

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
55 views

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
64 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
207 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
35 views

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
134 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
43 views

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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38 views

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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1answer
31 views

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
105 views

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
37 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
20 views

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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3answers
53 views

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
51 views

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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1answer
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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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24 views

Does the stock market usually overshoot both ways?

I've loosened Lee Spelman's contention from "always" to "usually". I pasted her biography to prove she appears qualified. Lee Spelman, managing director, is the Head of U.S. ...
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51 views

Does the Efficient Market Hypothesis explain why Cheaspeake Energy skyrocketed from \$25.95 to \$77.5 before tumbling to \$21 over 3 days?

In this question's title, I reported the daily highs for CHK for June 5th 2020 ($25.95), 8th, and 9th. CHK had been rumoured to file for Ch 11 bankruptcy since March 2020(?), and it did on June 28. ...
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1answer
47 views

What does Eugene Fama mean “variance of price changes over multiple days should be less than the multiple of the variance over a day”?

I transcribed A Symposium with 2013 American Nobel Laureates at Embassy of Sweden, Washington - YouTube starting at 54:45. Martin Karplus (Chemistry)  challenges Eugene Fama. Look at how the stock ...
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1answer
27 views

Why is the Stock Market Cap / GDP ratio on FRED well out of date?

FRED posts the Buffet Ratio here: https://fred.stlouisfed.org/series/DDDM01USA156NWDB But it ends in 2017, anyone know why?
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35 views

CAPM and beta for individual stocks

Why do we just assume that the beta is constant for a stock? Could it not very well be the case that the beta is 1.2 in a bear (baisse) market and 0.8 in a bull (hausse) market for an individual stock,...
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1answer
35 views

Why are US equity prices and inflation inversely correlated?

Many comments on this r/stockmarket Reddit thread hypothesize an inverse correlation between USD value and US equity prices. Why would this be true in theory? It's not true in reality, right? Has the ...
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1answer
39 views

Why is it relevant for a company to use dividends to incentivize shareholders to maintain ownership of the company's stocks?

I was reading the definition of "Bottom Line" on Investopedia and one of the reasons companies increase their bottom-line is to issue payments (dividends) to stockholders as an incentive to ...
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1answer
30 views

How does the stock market's allocating resources differ from price signalling? [closed]

What does Erian mean that "You allocate uses of funds with sources of funds. And if you price that well, you get an efficient outcome."? Outcome to what? What does he mean the stock markets ...
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2answers
71 views

Macroeconomics differences of 2008 financial crisis and 2020 economic crisis

How is 2020 financial crisis different from 2008 financial crisis? For example, why have stock market indices (e.g. S&P500, NASDAQ-100) recovered so quickly (about 3 months instead of longer than ...
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1answer
51 views

What's the next largest company after Facebook of which the majority of the votes is controlled by a single person? [closed]

Mark Zuckerberg controls 57.9% of all votes among Facebook shareholders [1]. Currently, Facebook's market capitalization is more than $650B. It has been among the global top 10 public corporations by ...
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1answer
783 views

In Trailing Stop-Limit Orders, what does the Limit Offset mean?

I don't understand the "limit offsets" below that I colored red. Why do you need them? In Questrade's example, if the stock rises to your stop price of \$21, then you will be buying at \$...

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