Market Structure EDGE Blog

Market Structure EDGE Blog

On the Skids

On the Skids

If electoral processes lack the drama to satisfy you, check the stock market. Intraday volatility has been averaging 4%. The pandemic has so desensitized us to gyrations that what once was appalling (volatility over 2%) is now a Sunday T-shirt.

read more
Serenity

Serenity

Give us courage to change what must be altered, serenity to accept what cannot be helped, and the insight to know the one from the other. It’s a good life rule, a thoughtful notion after elections. And a way to see the stock market.

read more
Placid

Placid

The story now is how’s money behaving before The Big Vote? Depends what’s meant by “behave.” The Wall Street Journal wrote for weeks that traders saw election turmoil…

read more
Gaffes and Spoofs

Gaffes and Spoofs

You all remember the Fat Finger? It’s a gaffe, trading-style. In one 2014 instance, if the record can be believed, somebody in Japan accidentally tried to buy $700 billion of stocks including more than half the total outstanding shares of Toyota. The trades occurred...

read more
Supply and Demand

Supply and Demand

Supply and demand affect stocks the same way they do products in any market. Yet the supply of product – shares – is almost never a consideration. Traders just trade. Public companies suppose that telling the story to more investors will create volume and drive the price up. 

read more
Volatile Liquid

Volatile Liquid

There’s a beer in this for you. A glass of rosé from Provence if you prefer. What’s the most liquid stock in the US market? Let’s lay the groundwork. Stock exchanges describe market quality as low spreads. Spreads have never been tighter, they say, and costs for...

read more

Market Structure Basics

Roll Call

Apr 21, yesterday, is Texas A&M Aggie Muster.  Aggies everywhere gather to say “here” for Aggies lost in the past year, a roll call. It’s more poignant this time for my Aggie, Karen, and the many friends and family hailing from College Station.  Gig’em, Aggies....

read more

Money for Nothing

How much does free money cost? Everything, apparently. The play Hamilton by Lin Manuel Miranda has grossed over $620 million, seventh all-time on Broadway but still a long way from Phantom of the Opera, Wicked, and Lion King, theater’s billion-dollar trio. Hamilton is...

read more

Benjamin Graham

A decade ago today, stocks flash-crashed.  I’m reminded that there are points of conventional market wisdom needing reconsideration. It’s not because wisdom has diminished. It’s because the market always reflects what the money is doing, and it’s not Ben Graham’s...

read more

Reg Nemesis II

In the Colorado mountains at Steamboat Springs, the pixie dust florescence of greening aspen leaves paints spring onto the high country. In the bowels of equity markets there gurgles an emergent leviathan (maybe I should choose different imagery – but we’ll talk about...

read more

What’s Changed

We’ve been pandemicking across the fruited plain and through the stock market for better than two months. Now what? I still rue my decision Friday Mar 13 to delay skiing in Steamboat till the next day (it was Fri the 13th after all). The next day the slopes closed for...

read more

Blocking Volatility

The NYSE has proposed lowering the fee for trading to $0.10/100, or a tenth of a penny per share, or 10 mils. Did you know there’s a booming market where brokers routinely pay eight cents per share or $8.00/100 shares? What market? Exchange-Traded Funds (ETFs). We’re...

read more

Rules and Money

There are two pillars to market intelligence: The Rules, and The Money.   By market intelligence, I mean information about what’s pricing a stock. So, translating, information about what’s pricing a stock must derive from the rules that govern stock-trading, and how...

read more

Ticking Down

In 2016 to much fanfare, the SEC and the stock exchanges smashed a bottle of champagne on the looming bow of a tick-size study and launched that battleship into the markets.   Two years later the tick study is limping to port in a lifeboat. For those of you thinking...

read more

Streaming Market

Spotify ditched convention with its direct listing on the NYSE.   It didn’t raise money or ring the opening bell. It gave shareholders a way out. It’s a touchstone for the state of the capital markets. CrunchBase says Spotify has raised $2.6 billion in 22 funding...

read more

Auctioning Profits

What’s the closing auction worth? A member of the investor-relations profession last week posted a story for community discussion on a CBOE BATS proposal to open day-end auctions to exchanges that don’t have listings. (Editorial note: The SEC has now approved the BATS...

read more

Market Structure Map Blog at ModernIR

The most valuable thing is knowing what’s going on. The country is closing amid Covid cases. Simultaneously, the Shiller PE ratio of earnings in the S&P 500 is 33, a level exceeded in history only at the bursting of the Internet Bubble in 2000. What’s going on? (The picture here... Read more
Published on: 2020-11-18
If electoral processes lack the drama to satisfy you, check the stock market. Intraday volatility has been averaging 4%. The pandemic has so desensitized us to gyrations that what once was appalling (volatility over 2%) is now a Sunday T-shirt. Who cares? Public companies, your market-cap can change 4% any... Read more
Published on: 2020-11-11
On Nov 4, 2020, words commonly associated with a 12-step program come to mind. Protestant theologian Reinhold Niebuhr, who received the Presidential Medal of Freedom in 1964, sometime in the 1930s during the Great Depression is said to have coined the words we today call the Serenity Prayer. Ostensibly it... Read more
Published on: 2020-11-04
The data are more placid than the people. When next we write, elections will be over. We may still be waiting for the data but we’ll have had an election. Good data is everything.  Story for another time. The story now is how’s money behaving before The Big Vote? Depends... Read more
Published on: 2020-10-28
We rode the Colorado National Monument this week with our good friends from Sun Valley. There’s a lesson in it about life and stocks both. We would’ve been riding bikes in Puglia with them now, if not for this pandemic.  Oh, and part of the lesson learned is in Telluride.... Read more
Published on: 2020-10-21
There’s one left. This week brings the last pre-election monthly options-expirations cycle. It’s the final time to take or manage risk with options that expire after votes are cast. It might be instructive about trading bets. Options expire Thu-Fri this week, and through Oct 21. In Oct 2016, Market Structure... Read more
Published on: 2020-10-14
You’re wondering what the heck “vahlcue” is. It was up almost 4% in the last hour yesterday as stocks tipped off the diving board. Meanwhile, cue fall.  The photo at right reminds us that today is a consequence of yesterday. Autumn follows summer. In the Flat Tops near Steamboat, fall... Read more
Published on: 2020-10-07
You all remember the Fat Finger? It’s a gaffe, trading-style.  In one 2014 instance, if the record can be believed, somebody in Japan accidentally tried to buy $700 billion of stocks including more than half the total outstanding shares of Toyota. The trades occurred outside hours and were cancelled but... Read more
Published on: 2020-09-30