Security A book value = 20 Current Market Value = 35 100 Participants 98 retail = 8 billion in cash (75% static) (25% volatile) 2 banks = 2 billion in cash (75% volatile) ( 25% static) 100 participants trade security A, @ 35 bank (a) buys 1000000 shares bank (b) buys 1000000 shares 98 retail buys 2000000 shares = 20, 408 shares each bank (a) buys from bank (b) @ 45 = 1,000,000 shares bank (b) 10,000,000 profits bank (a) holds 2,000,000 shares @ 45 bank (b) buys from bank (a) @ 55 = 2,000,000 shares bank (a) 20,000,000 profits retail buys from bank (b) 2,000,000 shares @ 55 bank (a) & bank (b) no security exposure to security A bank (a) & bank (b) short security A, through shares/options security A plummets to 35 retail has 40,000,000 in losses bank (a) & bank (b) 40,000,000 in profits plus 30,000,000 in profits form the trend sales to each other bank (a) & bank (b) pay out bonus of 7,000,000 to its top echelon retail sits on 110,000,000 - 70,000,000 = 40,000,000 in losses rinse & repeat
so we know where the 40 mil came from .. (retail).. but where did the 30 mil from trend trading come from.. ..from thin air.. better then the FED!! trick is to change psychology to greed, where offloading isnt a issue.
so what happens when you burn the public.. to the point the public stay out of the market.. The market becomes cannabilistic.. they feed off each other instead of working with each other. Targets arent retail... its other large pools of cash.. banks/hedge funds..
to save the economy retail has to come back into the market.. sp 500... 1600 ..new highs, inflationary job creation. FED steps in and buys derivative futures. To hedge out insti's have to buy the underlyings..massive thin air money is created, that gets incorporated into security values.
"trick is to change psychology to greed, where offloading isnt a issue." --A lot of what Jesse Livermore was saying in Reminiscences of a Stock Operator. "so what happens when you burn the public.. to the point the public stay out of the market.. The market becomes cannabilistic.. they feed off each other instead of working with each other. Targets arent retail... its other large pools of cash.. banks/hedge funds.." --Totally agree. Been watching this play out for some time now... "to save the economy retail has to come back into the market.. " --I believe this to be true.
This is a lot of what Jesse Livermore refers to in "Reminiscences of A Stock Operator" he also one of those that said "there is nothing new in Wall Street"
Important to coat tail largest players. Otherwise might as well be sheeple. Wallstreet needs to resurrect the golden goose or house of dreams.
if retail thinks its logical to short, counter party to retail are the banks.. the banks push it up higher to blowout the less solvent retail players. force counter party to buy high sell low.
commonly traded 'dollar volume' leaders are the list of stocks, banks and hedge funds trade among themselves.