"Who cares if the price is right? Well, you might want the price to be right if you are an individual investor buying stock in your E*Trade account on your lunch break. You're buying at 12:45 not because you think the stock is unusually undervalued at 12:45, but because it's your lunch break. It would be reassuring if the market price was as accurate as possible, so that you'd know you've got a good chance of getting a fair price. Index funds, which are similarly value-agnostic, might have similar preferences. Accurate prices probably also make spreads smaller, so trading costs for both big and small investors are lower."The battle between short-term speculators and final money investors.
This blog is mainly a personal storage site for articles and papers that interest me. They will mainly be about financial markets, current policy issues and articles that relate to these topics. Have fun!
Thursday, April 23, 2015
Why Is Spoofing Bad? - Bloomberg View
Why Is Spoofing Bad? - Bloomberg View: An overview of market microstructure.
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