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> functionally a wealth transfer from grandma to an institutional trader This makes no sense. Grandma can only lose money if she sells, most are not actively t
by dkjaudyeqooe 2y ago
> functionally a wealth transfer from grandma to an institutional trader
This makes no sense. Grandma can only lose money if she sells, most are not actively trading in the market.
Also large trades are in both directions. Some are trying to unload large holdings and some are trying to build large holdings. These pools are merely trying to find other large transactions to be the counterparty, the net effect is to reduce volatility in the open market, which is the whole point: price stability for their transaction.
- matthewdgreen 2y agoI don't really understand what you're saying. The scenario being discussed is that I buy a financial product for a higher price then [hypothetical alternative]. We use the phrase "losing money" in many cases where your financial upside is potentially reduced compared to alternatives. It isn't a "this makes no sense" situation.