Obtaining liquidity for illiquid stocks

The problem While there are thousands of listed companies in India, for all practical purposes, stock market liquidity is the exclusive preserve of large companies. For small securities, the conventional continuous market presents daunting problems of liquidity. In conventional continuous trading, the price is made by the orders that come in from one . . . → Read More: Obtaining liquidity for illiquid stocks

Cancelling trades on an exchange: When is it a good idea?

When inexplicable things happen on an exchange, many people argue that those trades should be cancelled. I think it is useful to be clear about the test to apply for this.

The key question should be: Did something foul up in the order matching software? If order matching went wrong, or if there was . . . → Read More: Cancelling trades on an exchange: When is it a good idea?

There Is More to Gold than Mere Capital Appreciation: John Hathaway

John Hathaway, senior managing director of Tocqueville Asset Management, does not particularly trust banks to keep stores of physical gold safe and segregated. Indeed, he considers his black lab Jake a better watchdog than the SEC. That is why he favors the SmartMetals program from Hard Assets Alliance, a new service launched in . . . → Read More: There Is More to Gold than Mere Capital Appreciation: John Hathaway

Emergency Liquidity Assistance in the Eurozone – Draghi’s Irreversible Euro Put Explained

Last week was not short of volatility with a three party central bank bingo and the nonfarm casino to cap it off. Markets went into the week with extreme expectations and as it became clear that central banks would do nothing concrete, the disappointment loomed.

Still, Draghi seemed to pull yet another rabbit . . . → Read More: Emergency Liquidity Assistance in the Eurozone – Draghi’s Irreversible Euro Put Explained

The Curious Case Of Liquidity Traps And Missing Collateral – Part 2

In this second part of my take on liquidity traps and missing collateral in global financial markets I would like to respond to some of the talking points set out by FT Alphaville’s Cardiff Garcia (again in response to the much talked about piece by Credit Suisse). Even though blog posts tend to . . . → Read More: The Curious Case Of Liquidity Traps And Missing Collateral – Part 2

The Curious Case Of Liquidity Traps And Missing Collateral – Part 2

In this second part of my take on liquidity traps and missing collateral in global financial markets I would like to respond to some of the talking points set out by FT Alphaville’s Cardiff Garcia (again in response to the much talked about piece by Credit Suisse). Even though blog posts tend to . . . → Read More: The Curious Case Of Liquidity Traps And Missing Collateral – Part 2

Trading in the rupee: Starting to look like serious numbers

by Vimal Balasubramaniam and Ajay Shah.

The rupee-dollar is the most important price of the Indian economy. It is discovered on the currency market. What are the contours of this market? Specifically:

How big is the daily trading in the rupee? Where does the rupee stand, in global rankings of currencies? Where does trading . . . → Read More: Trading in the rupee: Starting to look like serious numbers

The costs in buying versus the costs in selling

All models are wrong, some models are useful. A model reduces complications that are true in return for tractability and insight. In finance, all too often, one complication which has been wished away is transactions costs. A great deal of what we see in the world around us is caused by the costs of . . . → Read More: The costs in buying versus the costs in selling

New insights into the events on the Indian stock market in the mid-1990s

Liquidity matters

One of the most important features of a financial market is liquidity. In a well functioning market, a trader faces low costs of transacting and can confidently expect that at future dates, across many states of nature, the cost of transacting will prove to be low.

The immediate impact of a low . . . → Read More: New insights into the events on the Indian stock market in the mid-1990s

Other Alpha Sources

I have been enjoying myself in the Austrian Alps last week and hence the lower output. Here is my look though, of a number of notable news stories and contributions.

Global Liquidity

Benoît Cœuré, Member of the Executive Board of the ECB has penned a speech (and argument) on global (excess) liquidity. Izabella likes . . . → Read More: Other Alpha Sources for February 13, 2012