The ISEQ Thread Part II - Trading below 2000

I have a horrible feeling the amounts owed are overwhelming. Putin said that Wall Street has lost the equivalent of 25 years of profit.

The value of the property assets backing the banks liabilities are unknowable, in the short, medium or long term.

This divergence has been accelerating:



2% of the world's population owns over half global wealth.
http://www.gizmag.com/go/6571/

At the same time, the world is has more productive capacity than ever.

There seems to be a problem of distribution, that is built in to the system.

There is a problem of distribution, I eluded to it elsewhere. In the likes of China and India there are still large swaths of the population excluded from the increase in economic activity. It is very difficult to break out of that position. In the West we have the equivalent sink estates and trailer parks. Money does not trickle down effectively or fairly.

There is a problem with what we are actually using our resources to produce. A lot of it is utter rubbish and the life expectancy of many of the goods is way to short. Really poor standards of design are common place.

And most importantly there is a difficulty in providing sensible investment opportunities for those with money. People who maybe have 5000-10,000 and don't want to lodge it in a Bank or hand it over to someone else to manage. Yes they can buy shares in BP or whatever, but how do you put these people in touch with someone providing micro loans for people to buy a few chickens or build a well in Niger, or a solar farm in Western Sahara, or even a small hydro scheme in Mayo. How do you put ordinary people with ideas in touch with others with a few Euro to spare? How do you create those networks, how do you cut out the corporate sector? How do you empower people?

EDIT and yes everywhere across Europe with the exception of Portugal closed in the red.

I have a question I hope someone can answer.

How can a stock open at 0.71 if it closed at 0.67 ?

What happened in between to cause a price change ?

Is the close price the last trade and the open price the first trade ?

EvotingMachine0197 wrote:

I have a question I hope someone can answer.

How can a stock open at 0.71 if it closed at 0.67 ?

What happened in between to cause a price change ?

Is the close price the last trade and the open price the first trade ?

Is it because there are computer transactions happening from abroad or queued up over night or somthing like that.

That's what I was thinking Audi. I'd be interested in what all these computers are saying to each other.

Are they brokers computers ?
Can the brokers see the queued trades outside of market hours ?
Can anyone else see the queue ?

The opening price seems to just appear at 0800 every morning.

EvotingMachine0197 wrote:

That's what I was thinking Audi. I'd be interested in what all these computers are saying to each other.

Are they brokers computers ?
Can the brokers see the queued trades outside of market hours ?
Can anyone else see the queue ?

The opening price seems to just appear at 0800 every morning.

Europe opens one hour earlier - could it be those trades that are going on over there?

You can keep buying or selling BMW shares here after the Dax has closed over there or something ..

It is after hours trading, there is less trading volume so it can be more volatile.

Squire wrote:

It is after hours trading, there is less trading volume so it can be more volatile.

But but ... If the ISE is closed, the trades can't be completed ? They have to be queued as Audi says ?

Are they queued on an ISE computer ?

Is it not before hours trading moreso?? Maybe you can see the prices in DJSTOXX50 or whatever it's called.

EvotingMachine0197 wrote:

I have a question I hope someone can answer.

How can a stock open at 0.71 if it closed at 0.67 ?

What happened in between to cause a price change ?

Is the close price the last trade and the open price the first trade ?

Nothing could be more simple. On Thursday there was a lad willing to pay 71 pence. The market closes and he goes home. Over night he decides that he does not think it is worth 71 anymore and decides it is only 67. The buyer is the man that supplies the BID and the seller is supplying the ASK. So Friday morning the bid is 67 and the ask is 71. No trade takes place till one side meets the other. If the buyer does not budge then the seller if he wants to sell must drop his ask to 67 and the trade takes place. The stock opens at 67 down 4 cents from the previous close.

A popular big stock has thousands of buyers and sellers so the highest bid and the lowest ask is the same and it opens immediately at whatever price, could be quite different from the prior close. After market trading is just where a smaller number of traders trade small volumns usually.

A thinly traded small stock might have a huge difference between bid and ask if news hitseither good or bad. It might be hours before it opens after the bid and ask eventually agree on a price both accept

Thanks Dan.

Your explanation explains more than my question. You have a talent for explaining stuff in understandable ways. Long live you.

So if the ask is 69 and the bid is 65

Or the ask is 69 and the bid is 68

Is there anything to read from that ?

There is a difference isn't there

Don't forget the ISEQ is tied into some German trading system, the ISE Xetra which operates from 06:30 to 17:15 !!!! The order book is open for trading during the main trading hours but after hours there is book keeping and over the counter trading.

As for after hours trading it used to be the domain of institutions and professionals, but with modern electronics all you need is a network to put a buyer in contact with a seller. An (ECNs) Electronic communications networks.

You need to have an account with a Brokerage firm that has access Island is one such ECN , Instinet another, they are numerous. Some are regulated, some are not! Most are affiliated to online brokerage firms and all have their own rules. Some ECNs accept only limit orders. With these you specify a price at which you want to buy or sell, and if there is a match you have a trade. If that does not happen then the trade it can be linked to other markets or posted in the order book. You can place orders etc.

For small investors generally best to wait to normal trading the following day, and if you do feel the need make very sure you know the modes operandi of the network.

EDIT

YoungDan sorry you have already answered in your usual clear and uncluttered manner.

EvotingMachine0197 wrote:

Thanks Dan.

Your explanation explains more than my question. You have a talent for explaining stuff in understandable ways. Long live you.

So if the ask is 69 and the bid is 65

Or the ask is 69 and the bid is 68

Is there anything to read from that ?

There is a difference isn't there

Yes there is.

http://finance.yahoo.com/

This is the site that I use for market watching and is perfect. Even stuff like derivatives is easy to grasp as long as you take it step by step. Have a look at this in the morning coming up to 9.30. It tells you what the Dow, nasdaq, s and p 500 and most inportantly what the 10 year US Treasury bond is doing.

It gives a space at top left where you type in the symbol of the stock you want to check. For stocks which trade on the nasdaq it will give you the bid and ask and will give you how many shares are available at the bid and how many at the ask.

In our simple example there might be 100 shares ar 67 bid and 100 shares at 71 ask and it will open at maybe 69. However more likely that there will be what is known as an Order Imbalance especially if overnight there is bad news. In this case there might be few bidders and plenty of saddened sellers still hoping against hope of getting what they would have the day before the bad news hit. Then you will see the bid at say 64 of 100 shares and the ask at 71 but with 3000 shares looking to be sold there. You know that the stock is going to open at or close to 64 in this situation. After the lad buys his 100 shares at 64 he goes away and the next guy looking to buy might be on ly bidding 62 but willing to buy 2500 shares at this price. So before the stock opens you have a clue of the opening price from the bid and ask and the number of shares on offer or wanted. In a heavily traded stock there will be little difference between bid and ask. The difference between bid and ask is The Spread. In a thinly traded stock this can be large so if you bought then you would need the stock to rise by the amount of the spread to sell it at break even.

Only stocks traded on the nasdaq will give the bid /ask on this site so check microsoft symbol MSFT or google company whose symbol is GOOG to see the bids and asks and how they change.

If there is good news overnight there is the reverse. The bid will be much higher and the ask will have less shares offered for sale. The desperation to buy will be greater than hedesperation to sell on a bad news situation because shortsellers in the stock will be forced to buy as well to get themselves out of what is now a losing bet.

http://finance.yahoo.com/echarts?s=TFCO#symbol=TFCO;range=1d

Here is a good example of a thinly traded stock with a wide spread between bid and ask. There have only been 7 trades today so far

soooo Youngdan, just watched the Glenn Beck vid on the front page here.... they've printed a lot of dollars in the last few months.... where have they all gone and when are they going to cause hyperinflation. Moreover, any predictions as to what happens in the good ole Rest of the World as the $$$ devalues?? What happens if the last man standing (the ECB) refuses to join the quantitative easing printing party??

Que pasa??

mucho mucho dinero/pasta/plata

dollares hasta el cuello

I hear M3 is back in vogue it links Sunbury-on-Thames with Southampton now wonder where the M3b is.

With all the de leveraging, credit destruction, carry trade unwinding and asset down valuing I wonder is net money supply increasing?

Haven't watched it yet but I linked to a very good article by Gary North over on the iseq thread on P.ie. dealing with the situation for anyone who is interested

good question

Found a cool sub-site on the FT

http://www.ft.com/cms/s/0/61d7e148-8f15-11dd-946c-0000779fd18c,dwp_uuid=9c837fea-0087-11dd-a0c5-000077b07658.html

You can take a look at bank liabilities as a % GDP, also household liabilities. Interestingly, this site seems to think the Dutch and Danes are more indebted than ourselves and the UK....

Expat

You may find this interesting, and generally an interesting site.
http://ukhousebubble.blogspot.com/2009/02/unknown-circle.html


Bank of England .25% to come off interest rates later or steady as we go?

Squire wrote:

Expat

You may find this interesting, and generally an interesting site.
http://ukhousebubble.blogspot.com/2009/02/unknown-circle.html


Bank of England .25% to come off interest rates later or steady as we go?

I'm sure I read that article the other night... Does it describe a replica basically of the American sub-prime/CDS/derivatives thing that blew up last September and is still blowing up? 200 bn is the figure for debts that will have to be written down? What percentage of Uk GDP is that ?

I am going to take a wild guess and say that this credit growth is to off-balance sheet subsidiaries of commercial banks. Moreover, they are doing it to cover the collapse of funding sources that followed the breakdown of the mortgage backed securities market.

It all points to the terrible circle of problems besetting the banking system. During the boom years, UK banks used off-balance sheet vehicles that now make up the shadow banking sector to avoid regulatory capital requirements. These institutions were initially funded by non bank investors looking for higher yield and who willing bought up all those structured investment products like mortgage backed securities.

Now these investors have disappeared, and as these products mature, iinvestors want their cash back. These shadow banks are highly illiquid and have to make up interest and principle payments by taking out credits from their mother banks, who created them in the first place and who are mostly retail high street institutions.

As the shadow banking sector finance matures and is repaid, it sucks up potential credit sources for the rest of the economy. Moreover, the mother banks can not stop extending this new money because as soon as the credit flow to the shadow banks stops stops, they will go bust.

But it gets worse, the real economy is now starved of credit, economic growth is contracting, and asset values are collapsing, particularly for real estate. In turn, this undermines collateral values, increases default rates and threatens the very existence of the mother banks on the high street.

Is there a way out of this circle? If I was allowed to ask Mervyn two questions, that would be my second one.

A safe question is always, how are they hangin?

Audi

I think the important point is the information is from the Bank of England. It therefore follows that they and the government know what is going on and are seeking to mislead the generally public by emphasising the need to improve liquidity for business etc but are in reality giving Banks funds to shore up their off balance sheet vehicles which were set up to avoid what regulation there is. So the government is complicit?

Squire wrote:

Audi

I think the important point is the information is from the Bank of England. It therefore follows that they and the government know what is going on and are seeking to mislead the generally public by emphasising the need to improve liquidity for business etc but are in reality giving Banks funds to shore up their off balance sheet vehicles which were set up to avoid what regulation there is. So the government is complicit?

Is this something everyone suspects but few have proof / power of expression to define it ?

The emperor has no head.

The emperor most certainly has a head, in the sense that they have clear purpose, the ones running around like headless chickens are the general populace. So much for NEW Labour.