Are Traders Ethical
- Thread starter OPTIONAL777
- Start date
no need for a book, i'll shed some light on this issue. there is no issue. it's all in your head. but go ahead and continue to believe it isn't..Originally posted by CoolTrader
The only way to justify your trading activity is to live a simple a life and donate most of your profit to charity. Then the judgement from God may be changed from SIN to NOT TOO BAD.
Read the book God in the Pits, which may shed some light on this issue.
If all market participants were Mom and Pop investor, the markets would be lousy - super low volume, wiiiiiide spreads, and trading by appointment. Program trading alone does a huge amount of NYSE volume, 20-40% on any given day is not uncommon, I think. Worldco alone does a couple percent or more of the NYSE daily volume. If there were no "traders" at all, we would not have anything near to the markets we have today. Everyone would suffer. When Mom and Pop's monthly investment hit the market, much more of it would disappear instantly from high commissions and wide spreads.
A market only needs liquidity if we assume that we must be able to execute market orders at every instant during the "trading" day (notice that they don't even call it an investing day!). Why couldn't we create an electronic market that accumulates all orders and does a giant match-up at the end of the day? Is it really that important to be able to buy or sell a security at 9:30, 9:31, 9:32, .... etc.? (It seems to me that only traders need round-the-clock liquidity)
And in a market with ONLY long-term investors, who cares what the spread is -- you put in a bid for what the security is worth as an investment and get shares if it reaches that price. And if you just want to buy or sell (for long-term investment purposes), what would be wrong with having to wait an hour or a day or a week for the volume of unmatched orders to reach an appropriate level of liquidity. No one expects to buy a house with a 60-second execution guarantee, why should investing (not trading) in securities be any different?
Of course, as a trader, I'm glad we have a trading day and all the interesting inefficient pricing dynamics that come with it.
And in a market with ONLY long-term investors, who cares what the spread is -- you put in a bid for what the security is worth as an investment and get shares if it reaches that price. And if you just want to buy or sell (for long-term investment purposes), what would be wrong with having to wait an hour or a day or a week for the volume of unmatched orders to reach an appropriate level of liquidity. No one expects to buy a house with a 60-second execution guarantee, why should investing (not trading) in securities be any different?
Of course, as a trader, I'm glad we have a trading day and all the interesting inefficient pricing dynamics that come with it.