Do you have to day trade to trade full time?

[Trembling Hand]

I dont understand, are you saying traders make the market more competitive?
--because that would add 'value' to society... and it maybe true... but in my opinion it is inconclusive.

!!!!

I'm saying if Mr fundie went to market in the SPI right now to hedge he's long 50 mil of trades he has done today the XJO would drop 300 points in an instant without traders providing liquidity.

If Qantas wanted to pre-purchase oil contracts for the next month and went to market the oil price would rise massively without liquidity.

You don't trade do you?

 

[cutz]

I dont understand, are you saying traders make the market more competitive?
--because that would add 'value' to society... and it maybe true... but in my opinion it is inconclusive.

Off course it adds value to society, going back to the airline example, without forward contracts the cost no hedging would show up in the form of much higher airfares, knock on effects, i'll leave that for you to work out.

 

[skyQuake]

I dont understand, are you saying traders make the market more competitive?
--because that would add 'value' to society... and it maybe true... but in my opinion it is inconclusive.

more liquid

Traders and speculators are essential to capital markets otherwise it will simply collapse. Even academics who scorn traders have admitted as much.

 

[freddy2]

I dont understand your argument, an airline can just buy a futures contract for next month.

my definition of trader is: never have intention to buy product- just trade price movement
-many traders dont even take the value of the product into consideration.
eg, buy high, sell higher.



yes... this is all very good.

but what value is being created?

Some of the value created is due to redistribution of risk. In effect the traders are insuring a risk and are making a profit from doing so and thus counter-parties can create more value because their risk is reduced. Overall society is better off as a whole with insurance/risk redistribution. Many people seem to think insurance is a bad bet because the insurer makes a profit but actually both parties usually benefit. Mathematically this is due to the utility of money not being linear.

 

[Trembling Hand]

Some of the value created is due to redistribution of risk. In effect the traders are insuring a risk and are making a profit from doing so and thus counter-parties can create more value because their risk is reduced. Overall society is better off as a whole with insurance/risk redistribution. Many people seem to think insurance is a bad bet because the insurer makes a profit but actually both parties usually benefit. Mathematically this is due to the utility of money not being linear.

Nice post freddy

 

[gooner]

One of the best things about being unemployed is that I get lots of time to spend with my kids. Which is where I have been for the last four hours - up the park, playing on swings etc. And perfect weather for it as well - a beautiful, warm, Sydney day. And a very useful contribution to society in bringing my kids up to be responsible members of society.

Am somewhat surprised at the amount of heat generated by my fairly innocuous (and to me obviously factual) post on the social value of day trading. I am unemployed, I have a share portfolio - these are facts. If I do nothing all day, but live on my dividends and capital growth, is that making a contribution to society? Sure I buy things and generate activity that way. But I do not make anything or service anything - I rely on others to do this. Given I am unemployed, I might expect to be called a bludger (although I am not on the dole), but I would be surprised if people said I made a great contribution to society by having a share portfolio. However, posters on this thread appear to think that if you are in my situation, but sit in front of a screen all day and make a few trades, then you suddenly make a great contribution to society.

Come on, seriously guys, if you want to make your money that way fine, but accept the reality that you are not making much of a contribution. But hey probably better than marketing cigarettes and whisky.

Gooner has a thick skin - has to given Arsenal's failure to win anything for a while, so looking forward to more responses.

Got an interview this week, so wish me luck.

 

[Trembling Hand]

I do always love when a punter holds stocks and righteously refuses to acknowledge that they are doing exactly the same as a trader just over a longer period.

 

[skc]

One of the best things about being unemployed is that I get lots of time to spend with my kids. Which is where I have been for the last four hours - up the park, playing on swings etc. And perfect weather for it as well - a beautiful, warm, Sydney day. And a very useful contribution to society in bringing my kids up to be responsible members of society.

Am somewhat surprised at the amount of heat generated by my fairly innocuous (and to me obviously factual) post on the social value of day trading. I am unemployed, I have a share portfolio - these are facts. If I do nothing all day, but live on my dividends and capital growth, is that making a contribution to society? Sure I buy things and generate activity that way. But I do not make anything or service anything - I rely on others to do this. Given I am unemployed, I might expect to be called a bludger (although I am not on the dole), but I would be surprised if people said I made a great contribution to society by having a share portfolio. However, posters on this thread appear to think that if you are in my situation, but sit in front of a screen all day and make a few trades, then you suddenly make a great contribution to society.

Come on, seriously guys, if you want to make your money that way fine, but accept the reality that you are not making much of a contribution. But hey probably better than marketing cigarettes and whisky.

Gooner has a thick skin - has to given Arsenal's failure to win anything for a while, so looking forward to more responses.

Got an interview this week, so wish me luck.

Contribution to society is such a subjective term your debate will go absolutely no where.

A mobile phone call centre staff think he's contributing to society by enhancing and enabling communication, others think he's annoying people in their own homes.

A car designer may think he's contributing to society by producing more efficient means of transport, others think he's promoting even more personal lesiure travel and hence polluting the environment.

An accountant doing the books for a miner think he's contributing to society by enabling raw materials to be harvested, others think he's part of the system that leads to excess, consumerism, environmental degredation and inequality in developing countries.

Good luck trying to get consensus.

 

[Cartman]

Am somewhat surprised at the amount of heat generated by my fairly innocuous (and to me obviously factual) post on the social value of day trading.

lol ---- i thought the heat generated was fairly luke warm myself ---

regarding your factual observation

so when i donate a % of my income each year to charity, i'm not helping society?

when i pay tax each year that doesnt help society ?

when i buy my stuffed olives etc at Woolies i'm not helping those young people stacking shelves and punching cash registers to earn some spare cash and gain job experience?

when i fill up my BMW with fuel (ok its a ford -- but it goes just as fast) that doesnt help either etc etc etc

95% of people dont work to 'help' society --- they work to earn money to look after their own 'society'

no offence Gooner, but a successful trader is indirectly (maybe inadvertently) adding a lot more value to society than u seem to realise

even an unsuccessful one who 'just' keeps himself off the dole is lowering the burden on the welfare system eh?

your view from a supposedly intelligent fella seems a little narrow minded

 

[Trembling Hand]

The value argument is a poor one. I don't think you are going to get a trader saying that they are more important than say, someone who cures cancer or discovers a life changing technology.

But if you think a capitalist system can work without price discovery that a large group of traders provide you are kidding yourself. They are just as important as any 1 level on a food chain. Take out the plankton and the whales starve to death.

 

[moXJO]

Anyone employed adds to society through taxes I would have thought. When has 'adding to society' been the prime motivation(if any) for getting a job?
It's an odd thing to bring out.

 

[tech/a]

Anyone employed adds to society through taxes I would have thought. When has 'adding to society' been the prime motivation(if any) for getting a job?
It's an odd thing to bring out.

Not really.
Its a reason.You and I value it as a poor reason.
My personal view is that its an excuse.
The REAL reason has not been put forward.
Only the poster knows this.

I liken it to selling a larger item.
Often you'll get all sorts of "excuses" why they won't purchase and a larger majority of the time the buyer will not tell you the REASON.
For example---I cant afford it (Real reason) as opposed to Your too expensive (excuse).

 

[Surfer35]

After stopping for a quick bite to eat at a McDonalds on the F3 on Saturday and seeing the type of society we have become (American mall society writ small), I'll withhold my contribution.

 

[gooner]

so when i donate a % of my income each year to charity, i'm not helping society?

when i pay tax each year that doesnt help society ?

when i buy my stuffed olives etc at Woolies i'm not helping those young people stacking shelves and punching cash registers to earn some spare cash and gain job experience?

when i fill up my BMW with fuel (ok its a ford -- but it goes just as fast) that doesnt help either etc etc etc

95% of people dont work to 'help' society --- they work to earn money to look after their own 'society'

no offence Gooner, but a successful trader is indirectly (maybe inadvertently) adding a lot more value to society than u seem to realise

even an unsuccessful one who 'just' keeps himself off the dole is lowering the burden on the welfare system eh?

your view from a supposedly intelligent fella seems a little narrow minded

Cartman - not disagreeing with you on the expenditure side - this keeps the wheels moving. It is more an argument that the actual act of trading does not add value, or negligible value to society compared to most other jobs. Sure there is minor price discovery (see below) but apart from that there are not goods produced, or services provided. A garbo keeps the streets clean, a call centre worker fixed your mobile phone problem, a bank clerk gives you cash, a doctor heals you, an architect designs building, a trader............

However, if someone is good at trading and can earn good money doing it, then I can see why that person would choose to do it. They are looking after there family. And whilst values are always subjective, IMHO it is above marketing cigarettes or running a casino in the values stakes.

The value argument is a poor one. I don't think you are going to get a trader saying that they are more important than say, someone who cures cancer or discovers a life changing technology.

But if you think a capitalist system can work without price discovery that a large group of traders provide you are kidding yourself. They are just as important as any 1 level on a food chain. Take out the plankton and the whales starve to death.

OK price discovery is important. There are hundreds of institutional traders and hedge funds moving billions around the market. Playing around with a few hundred k of equities really does not add much additional price discovery IMHO.

Not really.
Its a reason.You and I value it as a poor reason.
My personal view is that its an excuse.
The REAL reason has not been put forward.
Only the poster knows this.

I liken it to selling a larger item.
Often you'll get all sorts of "excuses" why they won't purchase and a larger majority of the time the buyer will not tell you the REASON.
For example---I cant afford it (Real reason) as opposed to Your too expensive (excuse).

tech/a - my key motivation for getting a job is to earn money. However, I like to feel that I am also contributing something via my job - however for me, this is a secondary consideration to earning money to support my family.

 

[Timmy]

Here is my contribution for today, just for you Surfer ...

After stopping for a quick bite to eat at a McDonalds on the F3 on Saturday and seeing the type of society we have become (American mall society writ small), I'll withhold my contribution.

The McDonalds on the F3 has an unusual distinction:
See this link

and this one.

Enjoy!

 

[Surfer35]

Thanks Timmy!

LOL

I am somewhat surprised given that I would have thought any rat game enough to hang around might have been on the menu should the hamburgers ever run out. Looks like most of the people there would eat anything not bolted down.

 

[Trembling Hand]

OK price discovery is important. There are hundreds of institutional traders and hedge funds moving billions around the market. Playing around with a few hundred k of equities really does not add much additional price discovery IMHO.

Who said a good day trader plays around with a few K

Its was not that uncommon for me to do 1 or 2 % of the aussie futs when I got going. And I know that most of the locals do far far more than me. They are day traders.

You clearly haven't a clue what a day trader actually does.

 

[Timmy]

Looks like most of the people there would eat anything not bolted down.

LOL - been there plenty of times myself, rats or not. And you're right about the need to have stuff bolted down.

 

[Trembling Hand]

Playing around with a few hundred k of equities really does not add much additional price discovery IMHO.

Really on second read this just sums it up. Gooner you really are clueless, Absolutely clueless. And i guess thats where miss understanding comes from.

Day Traders provide I would guess looking at the lack of change in open interest of futures and number of trades over 50% of the volume.

 

[gooner]

Who said a good day trader plays around with a few K

Its was not that uncommon for me to do 1 or 2 % of the aussie futs when I got going. And I know that most of the locals do far far more than me. They are day traders.

You clearly haven't a clue what a day trader actually does.

Trembling Hand.

If you are doing 1 or 2% of the turnover of the "aussie futs" (what is that - the whole exchange, AUD currency futures, interest rates), then you are obviously operating towards the top end and providing a reasonable amount of price discovery. However, you only have to read posts on this and other forums to know that lots of day traders (most) are not.

And I said a "few hundred k" not "a few k"