4 ms·

Why online in the evening? Do it in real time with an official federal FIX stream.

by melony 5y ago

filoleg 5y ago
Imo real time is not enough, but it is a solid bare minimum requirement. If private executives have to schedule and declare their company equity trades months and months ahead of time, why do we let the government officials off the hook with just real time? I am not proposing the same “months and months ahead” rules for politicians, because for private executives that restriction applies only to the equity of their own companies (while for congress it would be for all companies). But what about a day ahead? I think that’s reasonable to make government officials to declare their trade a day ahead. After all, unless it is some specifically-timed trade based on insider info, why would it matter? It is just a single day. But i would also be ok with “declared a day ahead to SEC, with the trade info being automatically released to the public the second it happens” (basically, same as real-time, but with an extra safeguard). Mostly proposing this one, because I am concerned that knowing their trades ahead of time publicly might introduce unwanted side effects.
- adoxyz 5y ago
  I'd be ok with them having to declare it months ahead of time, or better yet, banning individual stock ownership for members of congress who have the most privileged information.
- TheDong 5y ago
  > because I am concerned that knowing their trades ahead of time publicly might introduce unwanted side effects. Unwanted side effects like them not buying small volatile stocks that are perfect for insider trading, and instead buying large index funds that are difficult to manipulate? Frankly, anyone who's buying small named stocks that the market can move is either 1) a gambling addict, 2) a professional daytrader, 3) an idiot, 4) breaking the law, or 5) all of the above. I would personally prefer that we do not hire day-traders to represent us in government (or if we do, that they stop daytrading for the duration), so I'm fine if this just has the side-effect of no congress-people daytrading.
  - filoleg 5y ago
    Maybe I am misreading, but I am genuinely confused how small cap stocks are related to the conversation at all. My concern wasn’t regarding small cap ticker traders, but something more like attempting to manipulate the market movements by doing certain bogus trades, as well as tons of others that someone else could have come up with. Basically, I am sensing there might be unwanted side effects from this, but I am not sure. I don’t think it makes sense to worry about much, given that a “report a day ahead” system would be good enough and wouldn’t have as much potential for unwanted side-effects. Keep in mind, it wont only be the retail traders looking at the live feed of Pelosi’s trades, it will be all big institutional investors as well.
    - TheDong 5y ago
      Ah, apologies for not explaining more. What I meant was that if a congressperson says "I will buy $100 worth of $SMALLCO in two weeks", that would artificially increase the price of that stock, and the congressperson would get less money / traders would profit slightly by selling shares they got cheaply. This effect is what I thought you were concerned about. Such an effect can only happen if these known trades are a significant fraction of the market cap, or the activity, on that stock. The reason I'm talking about small cap stocks is that those are the only ones I think such side-effects would occur on, and such manipulation wouldn't really be feasible for things like large index funds or AAPL or such. Hopefully it makes sense what I'm trying to say now? It would indeed have severe negative side effects for a subset of possible trades, but I don't think those trades are reasonable ones to make.
      - filoleg 5y ago
        I understand what you are saying now better, thanks for clarifying. I still disagree that it would only affect small cap tickers. If it was only small cap tickers like you are saying, I would have been all in favor of your proposal with zero hesitation or second thoughts. While Apple might be an outlier example, I think that a congress person heavily investing into even significant cap tickers (like Palantir or Ford or Pfizer or etc.) could move the market and turn into a self-fulfilling prophecy. I am not worried about the investment dollar amount itself being the catalyst (because you are correct, senators don't have the raw amount of money needed to move the tickers by its own virtue), but everything else influenced by it. If everyone saw that some senator is extremely bullish on something like Ford, institutional investors will likely jump onto it as well (and large institutional investors definitely can affect the market with such moves, as they quite often do). Not even mentioning retail, but I agree that it isn't that important and can be disregarded for the purpose of this conversation. You are right that the retail dollar amounts aren't really high enough to move the ticker on their own for non-small-cap tickers (but it can make the pump from large institutional investors more significant).

Why online in the evening? Do it in real time with an official federal FIX stream.

by melony 5y ago

Why online in the evening? Do it in real time with an official federal FIX stream.

Imo real time is not enough, but it is a solid bare minimum requirement. If private executives have to schedule and declare their company equity trades months and months ahead of time, why do we let the government officials off the hook with just real time? I am not proposing the same “months and months ahead” rules for politicians, because for private executives that restriction applies only to the equity of their own companies (while for congress it would be for all companies). But what about a day ahead? I think that’s reasonable to make government officials to declare their trade a day ahead. After all, unless it is some specifically-timed trade based on insider info, why would it matter? It is just a single day. But i would also be ok with “declared a day ahead to SEC, with the trade info being automatically released to the public the second it happens” (basically, same as real-time, but with an extra safeguard). Mostly proposing this one, because I am concerned that knowing their trades ahead of time publicly might introduce unwanted side effects.

adoxyz 5y ago
I'd be ok with them having to declare it months ahead of time, or better yet, banning individual stock ownership for members of congress who have the most privileged information.
TheDong 5y ago
> because I am concerned that knowing their trades ahead of time publicly might introduce unwanted side effects. Unwanted side effects like them not buying small volatile stocks that are perfect for insider trading, and instead buying large index funds that are difficult to manipulate? Frankly, anyone who's buying small named stocks that the market can move is either 1) a gambling addict, 2) a professional daytrader, 3) an idiot, 4) breaking the law, or 5) all of the above. I would personally prefer that we do not hire day-traders to represent us in government (or if we do, that they stop daytrading for the duration), so I'm fine if this just has the side-effect of no congress-people daytrading.
- filoleg 5y ago
  Maybe I am misreading, but I am genuinely confused how small cap stocks are related to the conversation at all. My concern wasn’t regarding small cap ticker traders, but something more like attempting to manipulate the market movements by doing certain bogus trades, as well as tons of others that someone else could have come up with. Basically, I am sensing there might be unwanted side effects from this, but I am not sure. I don’t think it makes sense to worry about much, given that a “report a day ahead” system would be good enough and wouldn’t have as much potential for unwanted side-effects. Keep in mind, it wont only be the retail traders looking at the live feed of Pelosi’s trades, it will be all big institutional investors as well.
  - TheDong 5y ago
    Ah, apologies for not explaining more. What I meant was that if a congressperson says "I will buy $100 worth of $SMALLCO in two weeks", that would artificially increase the price of that stock, and the congressperson would get less money / traders would profit slightly by selling shares they got cheaply. This effect is what I thought you were concerned about. Such an effect can only happen if these known trades are a significant fraction of the market cap, or the activity, on that stock. The reason I'm talking about small cap stocks is that those are the only ones I think such side-effects would occur on, and such manipulation wouldn't really be feasible for things like large index funds or AAPL or such. Hopefully it makes sense what I'm trying to say now? It would indeed have severe negative side effects for a subset of possible trades, but I don't think those trades are reasonable ones to make.
    - filoleg 5y ago
      I understand what you are saying now better, thanks for clarifying. I still disagree that it would only affect small cap tickers. If it was only small cap tickers like you are saying, I would have been all in favor of your proposal with zero hesitation or second thoughts. While Apple might be an outlier example, I think that a congress person heavily investing into even significant cap tickers (like Palantir or Ford or Pfizer or etc.) could move the market and turn into a self-fulfilling prophecy. I am not worried about the investment dollar amount itself being the catalyst (because you are correct, senators don't have the raw amount of money needed to move the tickers by its own virtue), but everything else influenced by it. If everyone saw that some senator is extremely bullish on something like Ford, institutional investors will likely jump onto it as well (and large institutional investors definitely can affect the market with such moves, as they quite often do). Not even mentioning retail, but I agree that it isn't that important and can be disregarded for the purpose of this conversation. You are right that the retail dollar amounts aren't really high enough to move the ticker on their own for non-small-cap tickers (but it can make the pump from large institutional investors more significant).