stock markets and the economy

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stock markets and the economy

Postby Grey » Wed Apr 13, 2011 7:16 pm

hi
i have an interview at a company called winterflood securities tomorrow and they are one of the leading market liquidity providers in the city of london

can someone tell me what that is, how a company like that would make their money and how and why stocks are traded?

what is the fear and greed thing?

i will check this thread before i leave for the interview tomorrow mornin and i better have something i can print off and read on the tube


much love x
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Re: stock markets and the economy

Postby NeoWarrior7 » Wed Apr 13, 2011 7:36 pm

NeoWarrior7 wrote:Stocks are sold to give a company money. They sell shares of the business, and use the money to grow and expand, typically. When they do well, the company is worth more, and so the stock goes up. If they're having problems, stocks go down. Or such is my understanding. As a stock holder, you have say in the company's direction, but I'm not sure how often this really happens unless you own a whole lot of a company's stock. And/or, you get paid a dividend. Basically, companies take a portion of the profits that they aren't reinvesting, and pay it out to shareholders. Not sure how much or how often, probably varies.

Googling liquidity gave me this, which is what I basically thought it meant.
"The degree to which an asset or security can be bought or sold in the market without affecting the asset's price. Liquidity is characterized by a high level of trading activity. Assets that can by easily bought or sold, are known as liquid assets"
Basically, liquid assets can "flow", or so I assume that's why they chose liquid. Stocks are liquid, as they get sold and traded all the time. Money's a big liquid asset, as they can typically be moved around easily. Pretty much anything that's money or can work like it. Non-liquid assets are, well, your equipment, buildings, any other non-tradable asset, I'd guess.

Stocks are traded on, you guessed it, the stock market and stock exchanges. Wall streets a big one, but NASDAQ I held a lot of fake stock in, because it tends to have you electronics companies, software producers, video games and computers, all that jazz. There are others, typically in major countries. I'd assume you, for example, would deal with or through the London Stock Exchange, I suppose. I'm going mainly on a few assumptions, really.

Why do people trade them? Money. Same as any market. Buy low, sell high. Beyond personal profit, and good stock traders can rake in a lot of cash, most people invest in them, if they have the money. Stocks, bond, all your other securities. They're typically a good place to store cash. In a good market, you should make a little cash, and if not hopefully they stay steady. A good balance of stocks, bonds and others are you hand money to a brokerage or retirement fund to invest in for you. Or, the market collapses, and well, a recession happens. Pretty much everyone stores cash in securities these days, which is why when it drops things go to the shitter. There are other reasons I believe, but this is a big one.

Sorry if I get a lot of words mixed up, it's been a while. This semester we're focused on the school store. Frankly, they're a complicated matter. That's why it's a whole avenue of education. It's also a major source of wealth, which is why, you know, those folks that get a financial degree tend to be filthy rich, along with bankers and whatnot.

From TTT
I'm sure someone here would know better then me though, that's a random gist. A liquidity provider, I would assume, deals in, well, either getting liquid assets to businesses when they need them, or maybe liquidation, turning illiquid assets into liquid ones.

Really though, I'd suggest browsing the internet for a reliable source, but maybe I'm addicted to google. What job are you going for, by the way?
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Re: stock markets and the economy

Postby Sentios » Wed Apr 13, 2011 9:29 pm

Grey wrote:they are one of the leading market liquidity providers


Basically means they make their money by contributing nothing themselves to society but instead leech off the efforts of people not sitting on buckets of money.
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Re: stock markets and the economy

Postby Valhallen » Wed Apr 13, 2011 11:06 pm

Looks like Winterflood makes money with trading and financial services, as well as some related software. That's a legitimate field, as not everyone wants to put in the effort and resources to do things like that themselves. As with other financial things, there's an incentive to overstate benefits and understate risks, but I don't know how good Winterflood is in that regard.
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Re: stock markets and the economy

Postby zepherin » Thu Apr 14, 2011 12:01 am

The purpose of a liquidity provider is to give stability to a given market. They facilitate trades between groups and provide the best price for the purchase. For most purposes these guys are the big front line traders and they make money because they buy and sell securities directly. They have access so they can buy an IPO as it comes out and they can movie a billion pounds worth of securities in an afternoon. They also handle dark liquidity and dark pools. Which are side markets that keep the trades as predictable as possible by allowing for side deals for large quantities of a security. So because they have access they get preferred pricing and if they are acting as an intermediary they get a piece of the trade too.

A stock is a unit of ownership for a company. Companies release stocks to raise money, but that is not the only way for companies to raise money. Bonds and loans are commonly used, and they are often bundled and sold as securities. Keep that in mind too when you go in because it is not just stocks that they deal in. Bonds, swaps, futures, derivatives are all considered securities.

The greed fear thing as you put it was made popular by Warren Buffet. It says that if everyone in the market is acting fearful to buy aggressively and be greedy because the value of the market is likely to be lower than it would normally be. If everyone in the market is being greedy the value of the market is likely to be higher than it normally would be because people are buying expecting the value to go up. If people are acting greedy put your money in secure investments, like insured bonds, if people are acting fearful and not investing, then put your money in riskier securities because they will be undervalued. that is the idea behind that saying anyways.

Depending on what type of job you are going in for depends on the type of knowledge you need to know to enter the business. If you are going in as an entry level data entry you need to have a basic understanding of how the various markets work.

The various stock exchanges NYSE, NASDAQ, LSE, etc are just places where securities are traded. They provide tools for traders to purchase and sell securities. The primary market is where companies release stocks, bonds, commodities, etc via public offering to the traders at a price and if the traders like the price for the offering they purchase it. The company you are applying for is into doing this. The primary market is the first time that item is sold. The secondary market is where most of the trades happen. This is the stock exchange that most people think about where mutual funds and brokerages trade back and forth to each other. If you are buying stock from a brokerage it is from the secondary market. Wallstreet is just a street that has several stock exchanges and runs through the Manhattan financial district. So a company lets say BP needs to raise money because they trashed an ecosystem. They have an entity underwrite a stock that they are going to release to the public. The underwriter will take a fee and release the stock onto the primary market for the initial purchase, I don't know if Winterflood offers this service their site didn't say, the participants in the primary market which Winterflood is a part of buy these securities in large batches and then hopefully they get a better price on the secondary market or they hold onto the security because they want part ownership stake in the company, or the bond is paying out a good rate for the price they picked it up for. Winterflood has liquidity specialists who buy these securities through Winterflood and operate on the secondary markets, brokerages and large individual investors are going to be likely clients.

If you are going into sales where most of your money is going to be commission based there are some other key phrasing that might help you. Knowing the above is good, but also saying that the reason you want to work there is so you can make a lot of money is good only if you are going into a commission heavy field, if not ignore that advice, and it may not be applicable to the UK to be honest.

Without knowing the specific field you are going into I can't really be more specific. If they ask you about your investment strategy "buy low sell high" is amateur hour, if you have an investment style then go with that, but if you need something to say. Go with "I buy strong stocks in strong sectors when the market is on an upswing. I short week stocks in week sectors when the market is on a downswing. I use technical analysis to determine strength and I use a trailing stop loss at %10 to limit my risk. If the market is unclear I sideline my money." If they ask you about the technical analysis tell them you use online technical analysis sites because they are free and save time. You can also say you have a simulated stock portfolio because you lack the necessary capital to overcome brokerage fees.
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Re: stock markets and the economy

Postby Grey » Thu Apr 14, 2011 9:24 am

okay i had my meeting with the usurists dudes
nothing immediate but i got connects
i'm gonna get a job within 2 or 3 months WATCH
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Re: stock markets and the economy

Postby Icha » Fri Apr 22, 2011 6:16 pm

Isn't liquidity sorta like taking something with a certain value, then turning it straight into cash?
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Re: stock markets and the economy

Postby Grey » Fri Apr 22, 2011 6:50 pm

i guess
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Re: stock markets and the economy

Postby zepherin » Sat Apr 23, 2011 12:15 am

icha_icha_paradise wrote:Isn't liquidity sorta like taking something with a certain value, then turning it straight into cash?

It's how easy it is to turn that item into a medium of exchange. High liquidity items would be cash, or money in a checking account or money in a savings account. Low liquidity items would be real estate, long term bonds, Gold, except where gold is the medium then it is high liquidity. Anything where you have to find a buyer. The longer it takes to turn the item into cash the lower the liquidity. Their business isn't exactly that. It is way more complicated.
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Re: stock markets and the economy

Postby zepherin » Mon May 09, 2011 5:32 pm

And your a filthy spammer who is a constant drain on the economy and everything around him.
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Re: stock markets and the economy

Postby Grey » Mon May 09, 2011 6:39 pm

you're*
how do people not understand the difference between your and you're
i expect better, zeph
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Re: stock markets and the economy

Postby Kris » Mon May 09, 2011 6:58 pm

How do you never capitalize words or use proper punctuation?
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Re: stock markets and the economy

Postby Grey » Mon May 09, 2011 7:55 pm

i used to but now i can't be arsed
you still completely understand what i mean because i use the right words, though
words are important formatting is not
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Re: stock markets and the economy

Postby zepherin » Mon May 09, 2011 8:47 pm

Yet you completely understood what I meant. That sounds a bit hypocritical to me.
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Re: stock markets and the economy

Postby Grey » Tue May 10, 2011 6:06 am

point!
ignore previous attempts at justifying my nit-picking and let me now say: pet peeve
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Re: stock markets and the economy

Postby Vegedus » Tue May 10, 2011 8:01 am

I am well aware of the difference between you're and your, but it still happens that I switch them, because it's an easy mistake to do. Think of it as a typo, it's just something that happens.
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Re: stock markets and the economy

Postby zepherin » Tue May 10, 2011 11:48 am

HA! Now that the bot is gone it looks like I am calling myself a filthy spammer. I love it.
Zeph do you ever tire of being perfect? ~Dave
Zeph is still awesome though. ~Rival
I love you so much right now Zeph. ~Yoshi
I love you Zeph. You and your simple yet humorous topic-breakers. ~Coos
Zeph has left me inspired. ~Mathias
Zeph is so awesome even soulless bits of binary worship him. ~Wizard
Curse YOU ZEPH! CURSE YOU! ~JesusChrist
WE ARE SORRY THAT WE ARE NOT AS PERFECT AS YOU, ZEPH! ~Stufflikehearts
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Re: stock markets and the economy

Postby Sentios » Thu May 12, 2011 9:55 pm

Their now I'm glad that's settled.    Intentional word swap is intentional   
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