"THE MARKET... consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Alexander Elder

Wednesday, April 14, 2010

Be Happy, Low Volume is your Friend

Don't lend friends your money
see: Seeking Alpha

1 comment:

Charles Longfellow said...

Just for "fun", let's suppose we are gambling. Let's play Blackjack. Should we be concerned if the dealer is a computer? Just because we learned with a deck of 52 cards..., why should a computer bother us? And yes, those cards do fly out of the back and front very quickly. Casinos insist on their version of randomness, to the extent that they actually ban known card counters, (humans that think like computers), from playing at the tables. Perhaps an important question to ask is when does Blackjack stop being Blackjack? When does perceived manipulation, (generous don't you think?), change the market so greatly that it really does destroy the original game. One clue will be when even price is considered an outdated indicator. If we collectively justify every destructive amendment to the rules, when does the market become truly vulnerable? The card counters have sat down at OUR table! Please, please, somebody kick them out.

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What is a Bucket Shop?

"Bucket Shop is a specifically defined term under the criminal law of many states in the United States which make it a crime to operate a bucket shop. [2] Typically the criminal law definition refers to an operation in which the customer is sold what is supposed to be a derivative interest in a security or commodity future, but there is no transaction made on any exchange. The transaction goes 'in the bucket' and is never executed. Without an actual underlying transaction, the customer is betting against the bucket shop operator, not participating in the market."
see: Wikipedia

The SEC believes that "internalization" is somehow different, and this affects ALL of your online trading, no matter what you are trading. Trades that are executed outside of the exchange, never reaching the main market, effectively hide data from technical analysis, and skew pricing.
see: Not a bucket?

"... internalization hurts retail customers and market quality"

see: EconPapers

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