Guy says when I place a trade, someone else goes short that position, is this true?

[timcar]

it has been a rough two days if your long aapl down 25 points ouch

 

[Redneck]

Quote from Newmoney24:

Just like title says, a guy I know keeps saying that, whenever I take a position, say 100 shares long in AAPL, someone else goes short that position (like an institution/market maker, etc), is this true?

He plays it as if getting into a position spells doom, gloom and slippage.

My perspective is that of a real market: if I buy 100 shares I marginally increase the demand and slightly push the price up (in this case by probably a fraction of a fraction of a cent)

Some insight would be great, thanks

It may or may not be true….. but whether it is..., or isn't – is not germane


Once you enter, what does price do after that / how much volume is involved (not referencing your 100 shares btw)

That’ll tell ya everything necessary – but not necessarily what you’re asking


As for your friend’s perspective – doom and gloom – potentially, if you don’t use a stop….. slippage – very… very doubtful

As to your perspective – I suggest you reevaluate it – respectfully of course

eta - whether you're buying another's entry or exit - is not nearly as important... as who is in charge..., or about to be - when you're going long... or short


Food for thought
RN

 

[chasinfla]

This is how it all began:

If a dealer is shorting a stock to fill an order, he's hedging his short in options. He is not net short, or he wouldn't be a dealer for long.

Life is better for a dealer if he can cross the order, but, being gravy, it is not the main course. They'll buy it if they can - "payment for order flow" is about one thing: buying crosses.

A scam OTC stock is of course a different story, but I did say "dealer".

Google market-maker, specialist, liquidity provider.

Nowadays, if your order is being filled by some other schmoe on an ECN, you have no idea whether he's hedging or if he's got a printing press in his bedroom.

If you google up "Naked shorting" and "Fails to deliver" and then connect some dots, you might conclude that the "printing press" model was used in 2008 not by mere schmoes, but by schmoes in very key places of the industry to bring down Bear Stears, Lehman Brother, AIG, (and countless relatively unknown issues) and would have taken down more had not the temporary ban been put into effect. This was made possible by lax enforcement in an environment of outright fraud on the most massive scale.

If you are interested enough to scratch the surface, You'll come across the Overstock.com story. Ignore all the hype and read some of the articles about naked shorting. There's an author who has done his homework and what he has to say will be incredible -- but he has credibility.

The specialist system was the best thing going, but the second generation was stupid and greedy so God punished them with things like Arca. And so we all suffer.

 

[chasinfla]

this is why schwab and td want your business - it's order flow they not only don't have to pay for, you pay them to take it.

 

[Gyles]

This is an important distinction to make. Options and stocks are not the same – options are basically an independent “bet” between two parties on the price of a stock. Stocks however don’t need someone to be short when a sale happens because it can just be transferring ownership of shares.

 

[emg]

Quote from Newmoney24:

Just like title says, a guy I know keeps saying that, whenever I take a position, say 100 shares long in AAPL, someone else goes short that position (like an institution/market maker, etc), is this true?

He plays it as if getting into a position spells doom, gloom and slippage.

My perspective is that of a real market: if I buy 100 shares I marginally increase the demand and slightly push the price up (in this case by probably a fraction of a fraction of a cent)

Some insight would be great, thanks

HFT will stop you out

 

[ammo]

jungle is full of animals emg