Rise of the HFT Machines
- Thread starter hawkeye
- Start date
systematic
Well-Known Member
that is rather disturbing
If there was no volaitily, then traders would not make any money.. cant make moeny if the price of something doesnt move..
systematic
Well-Known Member
[youtube]http://www.youtube.com/watch?v=RX7Cb-5N_bU[/youtube]
fishball said:
If there is no volatility, and no expected future volatility, then the staddle would be worth zero.
jnkmbx
Well-Known Member
I understood a volatile market to mean there are massive amounts of trades up and down, and one of the effects may be that the prices no longer reflect fundamental values.
Non-volatile in that case would mean a stable market, where there are fewer trades and assets/equities are sold/bought for investment value rather than to make gains on spreads.
@_@
Non-volatile in that case would mean a stable market, where there are fewer trades and assets/equities are sold/bought for investment value rather than to make gains on spreads.
@_@
jnkmbx said:
Whats the fun in that?
Besides the true fundamental value of an asset is really only what someone is prepared to pay for it... (every other attempt to quantify fundamental value uses arbitrary measures that are generally unjustifiable.. Eg PE ratio of 10)
jnkmbx
Well-Known Member
hyperinflation said:
It's not fun for the traders, sure, but my definition is accurate right?
hyperinflation said:
What an investor is willing to pay depends on the value they see in an asset. (e.g. "Woolies profits will grow as the population increases and therefore food distribution increases")
What a trader is willing to pay depends on the value they see the investor seeing in the asset. (e.g. "People are liking Woolies, I better buy it now and sell it on the way up", "People are hating Woolies, I better short it now and profit on the way down")
Both types of people affect the market price, but I see traders involvements as creating artificial padding.
It gets even worse with algos, which don't even understand value.
It's no longer about what "someone" is willing to pay if the market price went up due to a machine buying.
They see technical movements and make best estimates, which adds to the padding.
So we get prices being affected by what could potentially be regarded as a huge random number generator.
Also, let's remember that we can talk about assets being over or under priced relative to its fundamental value.
*creates bubble*
nonrecourse
Well-Known Member
The share market shake down scum and their aborted love child foetus the "financial planners" have robbed an entire generation of their retirement and life savings. Thank god we thumbed our noses at our accountants, their in office financial planners and the auditors each year when the subject of our asset allocation (100% commercial Property) in our super came up. We wrote up our own financial plan each year after tearing up the "advised plan" that was annually submitted to us.
The year after the GFC we had our properties valued and the fund net worth had increased 26%. The average super fund that year had gone backwards 14%. At that stage with the properties fully paid out and the titles in a bank vault we embarked on our gold and silver bullion stacking.
A financial planner who saw what we were doing by hedging in gold and got into a lather of rage after a short sharp exchange when I told him where he could shove his RG 146 diploma.
We are slowly building our stack towards the 5% physical bullion goal, a few more ounces went in the vault yesterday.
Kind Regards
non recourse
The year after the GFC we had our properties valued and the fund net worth had increased 26%. The average super fund that year had gone backwards 14%. At that stage with the properties fully paid out and the titles in a bank vault we embarked on our gold and silver bullion stacking.
A financial planner who saw what we were doing by hedging in gold and got into a lather of rage after a short sharp exchange when I told him where he could shove his RG 146 diploma.
We are slowly building our stack towards the 5% physical bullion goal, a few more ounces went in the vault yesterday.
Kind Regards
non recourse
Thats not really fundamental value.. Relative value yes - Woolies will do better than X if ppl eat more food, therefore I should buy wollies rather than X.. but that still doesnt tell me my I should invest in Wollies outright..jnkmbx said:
jnkmbx said:
Still struggling to get an explanation how the fundamental value ($/unit) of anything can be worked out. Yes, you could forecast the cashflow generated by Woolies in the next 5 year and PV that to today (already making at least 5 assumptions doing that), but this sort of fundamental value relies on numerous arbitrary inputs..
Whereas the market value relies on only 2 very unambigious inputs - the current BID and OFFER price.