Wall Street = Casino. Minus Sum Game.

This is a discussion on Wall Street = Casino. Minus Sum Game. within the General Trading Chat forums, part of the Reception category; Originally Posted by DionysusToast Yes - that's a block trade. If you hold a million shares & have a buyer ...

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Old Jan 13, 2010, 9:50pm   #36
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by DionysusToast View Post
Yes - that's a block trade.

If you hold a million shares & have a buyer for that million, you can sell that person your shares. There is no reason you have to use the ever-changing market price for those shares, in fact it's not possible that you will. Just by the fact the negotiation will take time means the market price will probably be elsewhere when the trade is executed.

There is nothing criminal about this -it's a buyer and a seller agreeing on a price.

Now - the exchanges exist for when the buyers need to be matched with a seller. In both cases, the laws of capitalism dictate that the buyer and seller will both be looking to get the best price they can.

Did you see the reason why the MM tried to raise the price by $1.50?There are funds with Assets under management requiring proof of market price.These funds are offloaded with 1m shares at an inflated price, the $1.50 on the exchange is cover up for charging fund extra $1.5m.The fund does not have to agree any price , as it is left to the manager but manager must show proof of of higher market price.
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Old Jan 13, 2010, 9:54pm   #37
 
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by oildaytrader View Post
Nothing new there to many of us.There is always going to be some cost of doing business.
It's that cost of doing business that makes it a -ve sum game and why the big boys always make money. As there always has to be an inflow of money to maintain the status quo it has to come from somewhere. They always win. QED.
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Old Jan 13, 2010, 10:05pm   #38
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It's that cost of doing business that makes it a -ve sum game and why the big boys always make money. As there always has to be an inflow of money to maintain the status quo it has to come from somewhere. They always win. QED.
If you trade euro usd the only advantage the big boys have is about 1 pip, no more.
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Old Jan 13, 2010, 10:10pm   #39
 
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by oildaytrader View Post
Did you see the reason why the MM tried to raise the price by $1.50?There are funds with Assets under management requiring proof of market price.These funds are offloaded with 1m shares at an inflated price, the $1.50 on the exchange is cover up for charging fund extra $1.5m.The fund does not have to agree any price , as it is left to the manager but manager must show proof of of higher market price.
A fund cannot agree a price. A fund is not a person. The would agree a price on behalf of a fund.

There is something called 'Fiducary duty' and another thing called 'profit related bonus' bith cause the manager to get the best price.

If you are saying that a fund manager will purposely sell something below it's market value to benefit the buyer at the detriment of his employer, I think you have been misled. This would be a form of embezzlement.

You have to understand that if you are offloading 1,000,000 shares and the normal daily volume is 3,000,000, then the price you get will naturally be below the price the market was at when you initiated the trade. If you attempted to dump all 1,000,000 shares on the market at once. So - for a block sell like this - you cannot reasonably expect to get current market price either.

Of course, if your buyer is more desperate than you - you could get above the market price.
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Old Jan 13, 2010, 10:22pm   #40
 
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Re: Wall Street = Casino. Minus Sum Game.

A good example of a highly visible block trade and the effects is when Abu Dhabi dumped their Barclay's holding mid last year when it was trading close to 4 - look at the price they paid and how the market behaved that day. The price drops because they are demanding liquidity from the market and there is a price to pay for this.
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Old Jan 13, 2010, 10:29pm   #41
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by DionysusToast View Post

If you are saying that a fund manager will purposely sell something below it's market value to benefit the buyer at the detriment of his employer, I think you have been misled. This would be a form of embezzlement.

.
Embezzlement and fraud are hallmarks of Wall Street insiders.Out of 60 million people in the U K , only a few thousand get caught and go to prison.The rest are free and the same proportion is free on Wall street.

Multiple fees charged to pension funds

http://www.zimbio.com/Hank+Greenberg...uit+Settlement
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Old Jan 13, 2010, 10:44pm   #42
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Re: Wall Street = Casino. Minus Sum Game.

If some of you don't know , the Wall street insiders have embezzled U S tax payers for around $170bn.

http://info.moneyweek.com/article.ph...gle&p_id=11046
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