4 ms·

If the market had all information then there would be no trading as the price would be correct and nobody would want to buy or sell, as doing so would be money-

by daemin 2y ago

If the market had all information then there would be no trading as the price would be correct and nobody would want to buy or sell, as doing so would be money-losing. The market works because of different information, opinions, ideas that are available to different participants. Trading on insider information is like doing a pump and dump, and should be illegal.

chii 2y ago
> there would be no trading as the price would be correct the trading would happen when your personal risk is different from another trader. Future events (that have not yet happened) will also make each individual trader do trading based on their predictions. It's absolutely not true that there's not going to be any trading. After all, unless every trader's internal risk rating and funding are _exactly_ the same, trading must happen, especially if information is very transparent. > should be illegal. just because it's declared illegal, doesn't mean it doesn't happen, nor people don't get away with it. It's why i claim that the next best thing is to _make_ it legal, but force the trade to be revealed instantly rather than have a 1 month time gap. In the event that an insider (or potential insider) starts making large trades, there will be people observing and making similar trades, and thus the insider information (despite being obscured) is transmitted out via this trade signal. The faster this signal gets transmitted, the less insiders will have an opportunity to profit unfairly.
toss1 2y ago
>>nobody would want to buy or sell, as doing so would be money-losing. Somewhat related, there is a saying that caused me great hesitation for many years: "Remember, whatever trade you make, someone else is making the exact opposite bet; what is the likelihood which of you is wrong?". Now, in large, this hesitation is largely good, but not to excess. I then realized that on the exact same trade people can have very different legitimate perspectives that do NOT invalidate yours, i.e., many situations where you can both be right, for your goals. E.g., a trader may have a great reason to sell a stock this minute while a long-term investor has an equally great reason to buy and accumulate the stock. Or, stocks can go in/out of specific investing criteria such as for growth, value, momentum, etc., and different portfolio managers will be selling and buying the same stock at the same minute and both be completely correct about the stock meeting their goals.

by daemin 2y ago

chii 2y ago

> there would be no trading as the price would be correct the trading would happen when your personal risk is different from another trader. Future events (that have not yet happened) will also make each individual trader do trading based on their predictions. It's absolutely not true that there's not going to be any trading. After all, unless every trader's internal risk rating and funding are _exactly_ the same, trading must happen, especially if information is very transparent. > should be illegal. just because it's declared illegal, doesn't mean it doesn't happen, nor people don't get away with it. It's why i claim that the next best thing is to _make_ it legal, but force the trade to be revealed instantly rather than have a 1 month time gap. In the event that an insider (or potential insider) starts making large trades, there will be people observing and making similar trades, and thus the insider information (despite being obscured) is transmitted out via this trade signal. The faster this signal gets transmitted, the less insiders will have an opportunity to profit unfairly.

toss1 2y ago

>>nobody would want to buy or sell, as doing so would be money-losing. Somewhat related, there is a saying that caused me great hesitation for many years: "Remember, whatever trade you make, someone else is making the exact opposite bet; what is the likelihood which of you is wrong?". Now, in large, this hesitation is largely good, but not to excess. I then realized that on the exact same trade people can have very different legitimate perspectives that do NOT invalidate yours, i.e., many situations where you can both be right, for your goals. E.g., a trader may have a great reason to sell a stock this minute while a long-term investor has an equally great reason to buy and accumulate the stock. Or, stocks can go in/out of specific investing criteria such as for growth, value, momentum, etc., and different portfolio managers will be selling and buying the same stock at the same minute and both be completely correct about the stock meeting their goals.