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posted by
CoolHand
on Thursday April 30 2015, @06:58AM
from the at-least-someone-tweets-something-that-matters dept.
from the at-least-someone-tweets-something-that-matters dept.
Twitter was due to announce its earnings for the first quarter of the year after close of trading on the New York Stock Exchange, where the company is listed.
Except it turns out that somebody thought it would be a good idea to release this information early, on the technology-led NASDAQ run Investor Relations page for Twitter.
Initially it seemed no one really noticed the error, until a well-placed tweet highlighted the mistake and revealed Twitter's disappointing results.
http://www.bbc.com/news/technology-32511932
At one point in the final hours of trading, the stock had lost more than $8 BILLION.
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One Tweet Cost Twitter $8 Billion
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If you learn one useless thing every day, in a single year you'll learn
365 useless things.
(Score: 5, Informative) by schad on Thursday April 30 2015, @01:49PM
Oh, that's what you're asking?
There are two prices for any stock. The bid is what someone will pay to buy the stock. The ask is what someone who currently has the stock will sell it at. The difference between the two prices is called the spread. Generally, as trading volume increases, the spread narrows; and as volume decreases, the spread widens. The spread is therefore often used as a measure of liquidity (how easy it is to trade a particular stock).
The role of the stock market -- originally floor traders, but now it's computers -- is to match up buyers and sellers. This may seem like a really simple thing, but stock is never sold individually. It's sold in bigger lots of 100s or 1000s of shares or more. So if you want to buy 100 TWTR at 40.00, you may not be able to even if there's someone offering 1000 TWTR at 40.00 -- because those 1000 shares won't be split to meet your offer. Instead, the computers will look only for 100 shares, and if the only 100-share offer is at 40.05, there's no match. Exact details vary. Some markets may split orders. But I think they all match orders atomically: either your order is completely fulfilled, or it is not fulfilled at all. Nothing in between.
(This is where HFT gets involved. You put in a sell order for 1000 TWTR at 40.00. The HFT sees there are 10 buy orders for 100 TWTR at 40.05. It will buy the 1000 shares at 40.00, split them into 10 lots of 100 each, and put them back out at 40.05. The exchange will then match them up with the buy orders and the HFT will make have made $50. When HFT proponents talk about "increased liquidity," this is exactly what they're talking about. HFT does a lot of much-worse things too, but to the extent that it has any beneficial effect, this is what it is.)
Smaller transactions happen outside of the "actual" exchange. What happens is that your broker owns some shares in everything, and you are actually buying from or selling to him. And, in fact, your broker probably isn't on the exchange either. This is part of the reason that they all warn you that trades may not execute immediately (or at all). If you try to buy a stock that your broker doesn't have, somebody -- your broker, his broker; somebody -- has to buy it for you. And that may involve buying 1000 shares of it even though you only asked for 1. To come up with the funds for that, there might be assorted other transactions. This is all computerized too, which is why basically all brokers can instantly execute your orders these days. And that's why it's bullshit that there are transaction fees (back when this stuff involved making lots of phone calls and such, it was much more reasonable to pay your broker per transaction).
All of these details vary by what you're trading, where you're trading, and (at least potentially) how much money you have at your disposal. But this is the gist of it.
By the way, the price you see quoted is generally the last transaction price, which will usually be very close to the lowest current ask price. The price quoted by your broker may well be different. That's because you're buying from your broker, not the market. But they try to keep the prices close.
Does that answer your question?
(Score: 0) by Anonymous Coward on Friday May 01 2015, @06:27AM
Three. There are three prices for any stock. The third is set by the originating corporation and it is the par value. That is, the value the company which the shares represent a part of have set on shares and record in their books.
This is an accounting and law issue that most people not interested in corporate books or governance don't think about, as the markets run on faith, bots, and insanity. It might as well be another plane of existence.