I hope that e-trade child had this

[byu71]

happen to him today. You could have bought PG today on the OTC when the NYSE halted trading for 90 seconds for as low as $40. It went up to $60. Let"s say that little guy sold it at $60. The OTC is not going to honor his buy at $40.

So he is now short the stock at $60.

[DU Ute]

Dad? Dad?

[Katy Lied]

They always say that they're going to punish the traders whose responsibility it is to make a market in the stock, but instead flee the market in times of volatility. But they never do. Not after Black Monday, not after yesterday. So they get their monopoly market making position scot free, because they're not living up to their responsibilities. How hard is it to create a program trading software that kicks into action when the stop-loss action gets up to a certain velocity?

Maybe they should assess those market makers a certain percentage of the cost (say... 20%) of all the losses that result when they have to unwind the orders. Just enough to get them to answer their dang virtual phones during freefall.

[Uncle Ted]

happen to him today. You could have bought PG today on the OTC when the NYSE halted trading for 90 seconds for as low as $40. It went up to $60. Let"s say that little guy sold it at $60. The OTC is not going to honor his buy at $40.

So he is now short the stock at $60.

Forget PG... Accenture (AGN) went from trading at $41 to $0.01 and then back.

[byu71]

They always say that they're going to punish the traders whose responsibility it is to make a market in the stock, but instead flee the market in times of volatility. But they never do. Not after Black Monday, not after yesterday. So they get their monopoly market making position scot free, because they're not living up to their responsibilities. How hard is it to create a program trading software that kicks into action when the stop-loss action gets up to a certain velocity?

Maybe they should assess those market makers a certain percentage of the cost (say... 20%) of all the losses that result when they have to unwide the orders. Just enough to get them to answer their dang virtual phones during freefall.

I will give you my personal cynical view. It may be crap, but that has never stopped me from expressing it anyway.

It is first about power and once you have the power, then it is about money. Wall St. and more importantly the finanacial centers have the power. They have cut costs to trade to nothing. A penny or two. No problem, let's just run through a billion shares. A couple of pennies a share is ten grand on a million shares. So what is that for a billion, 10,000,000?

I heard it with Milliken, program trading, derivatives, et. al. They create liquidity and that's good, to which I say horsecrap. Liquidity for who, traders that's who. Speculators and gamblers. I believe over the long run the markets will be based on fundamentals, but we get these wild aborrations because of all this horsecrap that goes on.

I will admit, some of it probably is important. Derivitives that let the farmer hedge against his produce. Airlines being able to hedge against oil costs. The rest of it though is people just trying to figure out ways to count cards, figure out the mathmatical odds on the dice. It reminds me of the time my buddy and I went to Vegas. We figured if we doubled our bet every time, over the long haul we couldn't lose. Bet a $1, then $2, the $4, at some time we hit it and win the $1 and start over. We were going along fine and then lost like 9 in a row. Next bet was was $512. We couldn't pull the trigger. I guess if we were playing with other peoples money we could have kept trying.

The problem from my perspective is this stuff scares the heck out of the retail investor who just wants to save for the long haul. He is OK with 10% a year over the long haul. However, more and more he hears about this crap that goes on on Wall ST. and decides it isn't a game he wants to get involved in.

Back to power and money though. The more gamblers, the more action, the more money, the more influence with politicians to keep the game alive. What did Dick Grasso the former head of the NYSE make, like a $100 million. What did he do to earn that money. It wasn't invest wisely. It was he sat back and watched. The more the trading, the better he liked it.

Opposing opinions are welcome.

[Indy Coug]

I will give you my personal cynical view. It may be crap, but that has never stopped me from expressing it anyway.

It is first about power and once you have the power, then it is about money. Wall St. and more importantly the finanacial centers have the power. They have cut costs to trade to nothing. A penny or two. No problem, let's just run through a billion shares. A couple of pennies a share is ten grand on a million shares. So what is that for a billion, 10,000,000?

I heard it with Milliken, program trading, derivatives, et. al. They create liquidity and that's good, to which I say horsecrap. Liquidity for who, traders that's who. Speculators and gamblers. I believe over the long run the markets will be based on fundamentals, but we get these wild aborrations because of all this horsecrap that goes on.

I will admit, some of it probably is important. Derivitives that let the farmer hedge against his produce. Airlines being able to hedge against oil costs. The rest of it though is people just trying to figure out ways to count cards, figure out the mathmatical odds on the dice. It reminds me of the time my buddy and I went to Vegas. We figured if we doubled our bet every time, over the long haul we couldn't lose. Bet a $1, then $2, the $4, at some time we hit it and win the $1 and start over. We were going along fine and then lost like 9 in a row. Next bet was was $512. We couldn't pull the trigger. I guess if we were playing with other peoples money we could have kept trying.

The problem from my perspective is this stuff scares the heck out of the retail investor who just wants to save for the long haul. He is OK with 10% a year over the long haul. However, more and more he hears about this crap that goes on on Wall ST. and decides it isn't a game he wants to get involved in.

Back to power and money though. The more gamblers, the more action, the more money, the more influence with politicians to keep the game alive. What did Dick Grasso the former head of the NYSE make, like a $100 million. What did he do to earn that money. It wasn't invest wisely. It was he sat back and watched. The more the trading, the better he liked it.

Opposing opinions are welcome.

Never in my life have I agreed with you more than I do right now.

[Uncle Ted]

The problem from my perspective is this stuff scares the heck out of the retail investor who just wants to save for the long haul. He is OK with 10% a year over the long haul. However, more and more he hears about this crap that goes on on Wall ST. and decides it isn't a game he wants to get involved in.

Here is the solution:



With Lord Vader regulating the trading floor investors will be safe from things like those IPOs that are "too risky".

Maybe stock trading should be limited to qualified investors only that don't mind losing money.

[byu71]

Here is the solution:



With Lord Vader regulating the trading floor investors will be safe from things like those IPOs that are "too risky".

Maybe stock trading should be limited to qualified investors only that don't mind losing money.

Maybe we should redefine the word "investing" and get it back to only mean what it should mean.

Buying a stock one day to turn it the next is not investing.

I would like Viking's comment on this.

To get in a hedge fund you have to be a qualified investor. That means you have to be worth a lot of money and have a lot of income. Is that because:

1)The powers that be only want to allow the rich to make money.

2)They want to make sure you have enough money to be able to afford to lose your ass.

[Indy Coug]

Maybe we should redefine the word "investing" and get it back to only mean what it should mean.

Buying a stock one day to turn it the next is not investing.

I would like Viking's comment on this.

To get in a hedge fund you have to be a qualified investor. That means you have to be worth a lot of money and have a lot of income. Is that because:

1)The powers that be only want to allow the rich to make money.

2)They want to make sure you have enough money to be able to afford to lose your ass.

Don't you also have to deposit an extraordinarily large sum up front to get in?

[byu71]

Don't you also have to deposit an extraordinarily large sum up front to get in?

Yea, I think 1 million for starters. There are now mutual funds that call themselves hedge funds, because they use correlating assets, are allowed to short, etc. My guess is Viking would have great disdain for these types of "copy cats".

I am not trying to tick off Viking, but go google "hedge fund", then tell me what a hedge fund is. That is why I have now gone to the term "speculative hedge fund", because I don't want to offend hedge funds that aren't in there messing everyting up. I have actually personally met Big Daddy D who post on CB. Good guy and I wouldn't consider him a speculator either.

For anyone who thinks "speculative hedge funds" don't mess things up, google Bear Stearns and hedge fund, Lehman and hedge fund, try Merrill and hedge fund. The sad thing is I don't think any of them considered themselves speculative, yet there clients had to fit a certain criteria to get in.

Again, is that because they are exclusive to the rich, because only the rich can make money or is it because they can afford to lose their ass.

I just figure the more disclosures, documents, etc. you have to sign to satisfy the lawyers, the riskier the investment.

[Indy Coug]

With the corporate owned life insurance (COLI) that I deal with, some of the bigger cases invest their money in hedge funds and IIRC, they have to come up with somewhere on the order of $10M to get in.

[byu71]

With the corporate owned life insurance (COLI) that I deal with, some of the bigger cases invest their money in hedge funds and IIRC, they have to come up with somewhere on the order of $10M to get in.

Anyone know what Bernie Madoff's minimum was.

Look, these folks need to do their due diligence and pick the good ones. There are a lot of good ones.

I actually have some clients who have a small portion of their money in a hedge fund and it has done well. It is positioned to be a hedge against the bulk of their assets. It isn't one that required 1 million by the way, but we did have to sign a lot of paperwork.

[Indy Coug]

Actually, for one Blackrock fund, I think it was $100M.

[byu71]

Actually, for one Blackrock fund, I think it was $100M.

Morningstar now has a category called long-short. This is where they put funds who say they are hedge funds or alternative investments strategies.