New answers tagged

2

Yes they do in in a several ways. The main ones are: Trading (not just of the people who actively manage the EFT but generally) helps price discovery. Price discovery is an important role of stock market. It is socially beneficial for companies to be appropriately priced given their fundamentals and all other avaiable information as that helps divert ...


3

I think asking people for a list here may lead to sample bias or a small sample set. If you want a more replicable approach, you could simply take the top influencers based on followers or retweets on social media platforms like Twitter, Stocktwits, etc.


0

The title says this question is about "financial markets". The body of text does not contradict that although Bitcoin is the only example discussed. If the question is about financial markets then the answer is that there are examples of markets segmented by currency. For example Cameco is 20.23 CAD and 16.16 USD as of 4PM today. On Yahoo the ...


22

It's not clear what level of answer you're looking for, so here is a much more basic answer. There are indeed many exchanges with many different prices. However, if you have noticed that you could make money by exchanging your BTC for USD, exchanging the USD for SEK, and then exchanging the SEK for slightly more BTC than you started with - then someone else ...


2

It would not prevent speculation driven bubble like GME but it would arguably prevent the situations such as Robin Hood being forced to restrict trading. This is because when you buy stock your transaction is actually not processed immediately but takes few days to clear (usually 2 days see here). This creates a problem because by law brokers like Robin ...


1

A quote would be on an exchange, and currency involved is whatever is specified on the exchange. There may be multiple exchanges - with different prices. (Price deviations between markets for financial assets are normally small, but that depends on the exchanges being liquid.) Data providers translate those quotes to other currencies based on the appropriate ...


8

Economic analysis always requires making some assumptions at some point. The assumptions that you make should try to fit reality the best that they can. Regarding your specific situation, there is a term in economics that might be helpful in describing what's going on: "Market Segmentation." This is a topic that is often studied in the asset ...


0

If a startup raises 10 million dollars, then spends 10 million dollars, and achieves nothing for it, their assets are zero and their liabilities are zero, so their equity is zero. The shares aren't worth 10 million dollars any more. They're worth zero.


2

You are concerned about... someting that can save the bank from bankruprtcy it problems occurs, when there is no money This is an accounting question as much as an economics question. What you are asking about is "solvency". assets minus liabilities equals equity The bank or any company is solvent by definition if equity is positive and ...


0

I revised this answer to more directly address the question posed. Apply the Charts of Account shown in the hypothetical bank balance sheet of this 4 page paper: https://www.richmondfed.org/~/media/richmondfedorg/publications/research/economic_brief/2012/pdf/eb_12-03.pdf Then your new bank holds 10M cash when it issues 10M paid-in equity. The bank uses the ...


1

Equity equals assets minus liabilities. If a bank “spent everything,” assets would be zero, and so equity would have to have been written down to zero. Expenses - including capital depreciation - generate losses that reduce equity unless there are offsetting sources of revenue. However, this is way too simplistic for discussion of a bank. Banking is a ...


2

I think what your quote is trying to say is: Investors have bid up US stocks to the point where their valuation ratios (e.g. pe) are high relative to other countries. This could lead investors to rebalance in favor of other stocks. Hence the downward pressure on the dollar. Whether or not that argument makes sense is another questions (about which I have my ...


0

When a long stock trade occurs legal titles transfer as follows: Ownership of "cash" transfers from the buyer to the seller; and Ownership of "shares" transfers from the seller to the buyer. So the trade is a swap of cash and shares of stock at the total transaction price. Divide the transaction price by the number of shares of stock ...


1

I understand that when buyers dominate the market the prices go up and when sellers dominate the prices go down (of course this is an oversimplification). People want to treat trading as some mechanical force. People are buying and selling shares, and the prices reflect where they want to transact. As news comes in, people can change their minds about a ...


0

Prices are stochastic and cannot be predicted with perfect accuracy. So when you talk about "predicting" prices or price movements, you have to specify what exactly you mean. Imagine a truly random price that in each month goes UP by \$1 with 90% probability and DOWN by \$9 with 10% probability. (Like a typical stock price that slowly climbs and ...


1

How can anyone possibly predict how the price of anything (stocks, Bitcoin, fiat, etc.) will change without “insider knowledge”? You can do that by forecasting based on data. Exact forecasting model will depend on exactly what you want to forecast but most economic variables can be forecasted with a degree of accuracy that is generally higher than just 50/...


0

Yes, there are companies that DON'T pay dividends to their shareholders. Some of these well-known companies are: Amazon.com Inc (AMZN) Facebook Inc. (FB) Netflix Inc. (NFLX) The main incentive shareholders get by buying at IPO is CAPITAL APPRECIATION. 98% of the time, the company will only be listed on the stock exchange if it has strong financial ...


1

Stocks: Stock (also capital stock) is all of the shares into which ownership of a corporation is divided Equity: In finance, equity is ownership of assets that may have debts or other liabilities attached to them. Equity is measured for accounting purposes by subtracting liabilities from the value of the assets


0

Equity is simply describing the ownership of an asset. Stocks are one form of equity, since they represent fractional ownership of a firm, and equity also expands to any other asset as person can own. Because of this stock prices are a subset of equity prices.


-1

Short answer is market values change when perceptions of the market valuation of the stock changes between at least one buyer and one seller in the last trade of shares. Long analysis first watch this video by Aswath Damodaran On The ‘Dark Side Of Valuation’: https://www.youtube.com/watch?v=3DtpkMOjH7s Then read his 50 page paper The Dark Side of Valuation: ...


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