Market Operators - Do they exist ? Who actually runs the show?
- Thread starter actuaryinmaking
- Start date
Do Smart money rationalize stock prices or ride the wave before the others?
The efficient markets theory, as it is commonly expressed, asserts that when irrational
optimists buy a stock, smart money sells, when irrational pessimists sell a stock, smart money buy
But, finance theory does not necessarily imply that smart money succeeds in fully offsetting the impact of ordinary investors. In recent ears, research in behavioral finance has shed some important light on the implications of the presence of these two classes of investors for theory and also on some characteristics of the people in the two classes.
From a theoretical point of view, it is far from clear that smart money has the power to drive market prices to fundamental values. For example, in one model with both retail traders who trade on news and price attraction ( in textbook they coined ‘feedback traders ) and smart money, the smart money tended to amplify, rather than diminish, the effect of , by buying in ahead of the feedback traders in anticipation of the price increases they will cause.
smart money never choose to offset all of the effects of irrational investors because they are rationally concerned about the risk generated by the irrational investors.
Recent study has focused on an important obstacle to smart money’s offsetting the effects of irrational investors. The smart money can always buy the stock, but if the smart money no longer owns the stock and finds it difficult to short the stock, then the smart money may be unable to sell the stock. Some stocks could be in a situation where zealots have bought into a stock so much that only zealots own shares, and trade is only among zealots, and so the zealots alone determine the price of the stock. The smart money may who know that the stock is priced ridiculously high may well use up all the easily-available shortable shares, and then will be standing on the sidelines, unable to short more shares and profit from their knowledge. In India there was a badla system where one can borrow and short sell, and I heard the stories of how ambani cornered few reliance short sellers and how market halt for few days.
There was another example..in tech buble in u s 3COM sold 5 % of its holdings ( they had 100 % holdings of PALM) in computer company PALM , PALM got so overpriced that when compared with the price of the 3Com shares, that it if one subtracts the implied value of the remaining 95% of Palm from the 3Com market value, one finds that the non-Palm part of 3Com had a negative value. Since the worst possible price for 3Com after the Palm sale was completed would be zero, there was thus a strong incentive for investors to short Palm, and buy 3Com. But, the interest cost of borrowing Palm shares reached 35 percent by July 2000, putting a damper on the advantage to exploiting the mispricing.18 Even an investor who knew for certain that the Palm shares would fall substantially may have been unable to make a profit from this knowledge. The zealots had wonwith Palm and had control over its price, for the time being.
So most of the evidence suggest that smart money is not a contrarian but infact buy before the crowd knows, so by the identifying the smart money traces one small investor/trader can earn happily out of it.
The efficient markets theory, as it is commonly expressed, asserts that when irrational
optimists buy a stock, smart money sells, when irrational pessimists sell a stock, smart money buy
But, finance theory does not necessarily imply that smart money succeeds in fully offsetting the impact of ordinary investors. In recent ears, research in behavioral finance has shed some important light on the implications of the presence of these two classes of investors for theory and also on some characteristics of the people in the two classes.
From a theoretical point of view, it is far from clear that smart money has the power to drive market prices to fundamental values. For example, in one model with both retail traders who trade on news and price attraction ( in textbook they coined ‘feedback traders ) and smart money, the smart money tended to amplify, rather than diminish, the effect of , by buying in ahead of the feedback traders in anticipation of the price increases they will cause.
smart money never choose to offset all of the effects of irrational investors because they are rationally concerned about the risk generated by the irrational investors.
Recent study has focused on an important obstacle to smart money’s offsetting the effects of irrational investors. The smart money can always buy the stock, but if the smart money no longer owns the stock and finds it difficult to short the stock, then the smart money may be unable to sell the stock. Some stocks could be in a situation where zealots have bought into a stock so much that only zealots own shares, and trade is only among zealots, and so the zealots alone determine the price of the stock. The smart money may who know that the stock is priced ridiculously high may well use up all the easily-available shortable shares, and then will be standing on the sidelines, unable to short more shares and profit from their knowledge. In India there was a badla system where one can borrow and short sell, and I heard the stories of how ambani cornered few reliance short sellers and how market halt for few days.
There was another example..in tech buble in u s 3COM sold 5 % of its holdings ( they had 100 % holdings of PALM) in computer company PALM , PALM got so overpriced that when compared with the price of the 3Com shares, that it if one subtracts the implied value of the remaining 95% of Palm from the 3Com market value, one finds that the non-Palm part of 3Com had a negative value. Since the worst possible price for 3Com after the Palm sale was completed would be zero, there was thus a strong incentive for investors to short Palm, and buy 3Com. But, the interest cost of borrowing Palm shares reached 35 percent by July 2000, putting a damper on the advantage to exploiting the mispricing.18 Even an investor who knew for certain that the Palm shares would fall substantially may have been unable to make a profit from this knowledge. The zealots had wonwith Palm and had control over its price, for the time being.
So most of the evidence suggest that smart money is not a contrarian but infact buy before the crowd knows, so by the identifying the smart money traces one small investor/trader can earn happily out of it.
Hi Nisha,
WOW!
Although I Have Been Back Posting For A Few Days Now, Didn't Get Time To Go Through Some Threads Until Today.
Lady You Are On The Right Track - Period!
Stock Market Manipulation Around The World Will Seem Like Nothing Compared To The Facts That Governments, Countries & Central Banks Are Being Manipulated.
Anways. Have Started A New Thread In WoW 'Articles Of Interest' That Over Time Will Attempt To Create Awareness, How & Why Everything In This World Is Being Manipuated.
Good To See You Asking The Hard Questions & Being So Active.
'Always Have A Dream'
SavantGarde
WOW!
Although I Have Been Back Posting For A Few Days Now, Didn't Get Time To Go Through Some Threads Until Today.
Lady You Are On The Right Track - Period!
Stock Market Manipulation Around The World Will Seem Like Nothing Compared To The Facts That Governments, Countries & Central Banks Are Being Manipulated.
Anways. Have Started A New Thread In WoW 'Articles Of Interest' That Over Time Will Attempt To Create Awareness, How & Why Everything In This World Is Being Manipuated.
Good To See You Asking The Hard Questions & Being So Active.
'Always Have A Dream'
SavantGarde
Yes true..ultimately market works on....
1) DEMAND vs SUPPLY.
2) ASK PRICE Vs BID PRICE.
2) ANTICIPATION vs REALITY of what could be past/present/future "Worth of Trading Instrument"
But...
DEMAND Vs SUPPLY is engineered (like many other trading instruments) and so is ANTICIPATED and perceived REAL "Worth of Trading Instrument".
Why is it engineered..?
So that it can fluctuate in big ways such a that someone can..
1) sell direct equity at higher price and buy at lower price....
2) earn on Futs discount/premium price movements (specially near expiry)
3) earn on Options (specially near expiry for next months Options)
How is it engineered?
This is complex science and no one except those who are doing it knows it in detail..but in my close observation this is what is seen...
Price of each scrip in Nifty is moved in synchronization...to hold nifty at let say some level..one scrip (per say let say SBI,RIL,ONGC, LnT etc) is moved up and then halted there..again other is moved and halted there...then first one is moved down etc etc etc....it is like Piano with 50 keys...they keep pressing it one after other..up down down up up up down down...in such a way that each scrip and nifty results in desire levels to fulfill the main objectives as in above point...
So who is doing it?
Smart Money, Market Makers, DII, FII, Market Operators, Bull Cartel, Bear Cartel etc etc...it is all involved network...even I suspect Corporate Management of each scrip is also involved in such moves...
Options are the biggest earning instruments for them in the market
Though I am not saying each and every move is engineered but many of them are...this is my humble opinion and close observations while monitoring Nifty heat maps price and volume movements etc etc your views may be different and totally opposites...it's just my two cents !
Ultimately...
Piano is played in such a way that it psyches general retailers GREED,FEAR,DOUBT and HOPE emotions...and ultimately traps them and rest is known after that.....those who plays with the trend and over comes all these four enemies are winner and those who goes against them and makes these four guys as friends are loosers..
What can we do to b winner?
rgds, Nisha
1) DEMAND vs SUPPLY.
2) ASK PRICE Vs BID PRICE.
2) ANTICIPATION vs REALITY of what could be past/present/future "Worth of Trading Instrument"
But...
DEMAND Vs SUPPLY is engineered (like many other trading instruments) and so is ANTICIPATED and perceived REAL "Worth of Trading Instrument".
Why is it engineered..?
So that it can fluctuate in big ways such a that someone can..
1) sell direct equity at higher price and buy at lower price....
2) earn on Futs discount/premium price movements (specially near expiry)
3) earn on Options (specially near expiry for next months Options)
How is it engineered?
This is complex science and no one except those who are doing it knows it in detail..but in my close observation this is what is seen...
Price of each scrip in Nifty is moved in synchronization...to hold nifty at let say some level..one scrip (per say let say SBI,RIL,ONGC, LnT etc) is moved up and then halted there..again other is moved and halted there...then first one is moved down etc etc etc....it is like Piano with 50 keys...they keep pressing it one after other..up down down up up up down down...in such a way that each scrip and nifty results in desire levels to fulfill the main objectives as in above point...
So who is doing it?
Smart Money, Market Makers, DII, FII, Market Operators, Bull Cartel, Bear Cartel etc etc...it is all involved network...even I suspect Corporate Management of each scrip is also involved in such moves...
Options are the biggest earning instruments for them in the market
Though I am not saying each and every move is engineered but many of them are...this is my humble opinion and close observations while monitoring Nifty heat maps price and volume movements etc etc your views may be different and totally opposites...it's just my two cents !
Ultimately...
Piano is played in such a way that it psyches general retailers GREED,FEAR,DOUBT and HOPE emotions...and ultimately traps them and rest is known after that.....those who plays with the trend and over comes all these four enemies are winner and those who goes against them and makes these four guys as friends are loosers..
What can we do to b winner?
- Discipline Discipline and Discipline - win your four enemies GREED,FEAR,DOUBT and HOPE....bit them with Trade plan with reason for entry in the trade, Strick SL, money and risk management etc etc.
- Trade the trend never ever try to trade what you think..trade what tune market is playing...
rgds, Nisha
So some sharks dictate the move of the market.
My take is different - always there is more than one shark and that creates the demand supply equation. The retailers can't be ignored as suckers. I think the heard mentality of the ivestors is behind the so called market moves. The sentiment of the heard can be manipulated to some extent by some leaders of the heard, but finally the population size(money held by the members in cash) of the heard dictates the end result. The heard is always dynamic - new members enter and leave the heard.
Just like our elections, many heards are lead by different parties - BJP, Congress, etc. They do everything to attract members into their heard, the one which susceeds in this effort wins. But the leaders capability alone is not the measure of victory. The prevailing sentiment among the individuals who already joined any heard, or not joined any heard decides the fate of the election. Most of time this sentiment is motivated by events beyond the control of the heard leaders. And this sentiment, if analysed properly, can be preditable. This is where technical analysis comes to the limelight.
Theory is simple, but practising it is not so. Every 10 Th passout knows the theory to launch a rocket to moon, but till now howmany nations has the capability to do it ?.
My take is different - always there is more than one shark and that creates the demand supply equation. The retailers can't be ignored as suckers. I think the heard mentality of the ivestors is behind the so called market moves. The sentiment of the heard can be manipulated to some extent by some leaders of the heard, but finally the population size(money held by the members in cash) of the heard dictates the end result. The heard is always dynamic - new members enter and leave the heard.
Just like our elections, many heards are lead by different parties - BJP, Congress, etc. They do everything to attract members into their heard, the one which susceeds in this effort wins. But the leaders capability alone is not the measure of victory. The prevailing sentiment among the individuals who already joined any heard, or not joined any heard decides the fate of the election. Most of time this sentiment is motivated by events beyond the control of the heard leaders. And this sentiment, if analysed properly, can be preditable. This is where technical analysis comes to the limelight.
Theory is simple, but practising it is not so. Every 10 Th passout knows the theory to launch a rocket to moon, but till now howmany nations has the capability to do it ?.
Look at this info...see who is buyer and seller for Akruti..same buyer same seller..price now dropped down....
Even why would it not be possible for same entity to transact with different names and do circular trading (by passing all NSE/SEBI loop holes) and bring price/down and up as it suits there Big positions ?
Would Big Money will play fair trading or fair positioning with intent to take a chance to loose their money and do charity ???
http://www.nseindia.com/content/equities/bulk.csv
- Know your battlefield...trade with them and in trend !! 
Even why would it not be possible for same entity to transact with different names and do circular trading (by passing all NSE/SEBI loop holes) and bring price/down and up as it suits there Big positions ?
Would Big Money will play fair trading or fair positioning with intent to take a chance to loose their money and do charity ???
http://www.nseindia.com/content/equities/bulk.csv
Code:
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
20-MAR-2009,AKRUTI,Akruti City Limited,C D INTEGRATED SERVICES LTD,BUY,342361,1682.53,-
20-MAR-2009,BOMDYEING,Bombay Dyeing & Mfg Co.,SUNEET LAL,BUY,254068,140.26,-
20-MAR-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,BUY,139127,1885.23,-
20-MAR-2009,EVERONN,Everonn Systems India Lim,ADROIT FINANCIAL SERVICES PVT LTD,BUY,82518,139.99,-
20-MAR-2009,EVERONN,Everonn Systems India Lim,ASIT C MEHTA INVESTMENT INTERRMEDIATES LTD,BUY,104316,140.03,-
20-MAR-2009,EVERONN,Everonn Systems India Lim,GENUINE STOCK BROKERS PVT LTD,BUY,105722,140.30,-
20-MAR-2009,EVERONN,Everonn Systems India Lim,OM INVESTMENTS,BUY,223432,140.29,-
20-MAR-2009,GUJNRECOKE,GUJARAT N R E COKE LTD,MOHSIN MIYANA,BUY,4240000,19.61,-
20-MAR-2009,NITINFIRE,Nitin Fire Protection Ind,BP FINTRADE PRIVATE LIMITED,BUY,79595,188.26,-
20-MAR-2009,SHYAMTEL,Shyam Telecom Limited,BP FINTRADE PRIVATE LIMITED,BUY,60074,55.84,-
20-MAR-2009,SHYAMTEL,Shyam Telecom Limited,VIJIT ASSET MANAGEMENT PRIVATE LIMITED,BUY,81133,57.12,-
20-MAR-2009,SREINTFIN,SREI Infrastructure Finan,ADHYATMA COMMERCIAL PRIVATE LIMITED,BUY,760000,29.98,-
20-MAR-2009,AKRUTI,Akruti City Limited,C D INTEGRATED SERVICES LTD,SELL,342361,1683.75,-
20-MAR-2009,BOMDYEING,Bombay Dyeing & Mfg Co.,SUNEET LAL,SELL,261479,140.37,-
20-MAR-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,SELL,139127,1886.49,-
20-MAR-2009,EVERONN,Everonn Systems India Lim,ADROIT FINANCIAL SERVICES PVT LTD,SELL,80118,140.34,-
20-MAR-2009,EVERONN,Everonn Systems India Lim,ASIT C MEHTA INVESTMENT INTERRMEDIATES LTD,SELL,104316,140.54,-
20-MAR-2009,EVERONN,Everonn Systems India Lim,GENUINE STOCK BROKERS PVT LTD,SELL,105722,140.30,-
20-MAR-2009,EVERONN,Everonn Systems India Lim,OM INVESTMENTS,SELL,223432,140.39,-
20-MAR-2009,GRABALALK,Grabal Alok Impex Limited,DEV KUMAR H VAIDYA,SELL,190000,55.00,-
20-MAR-2009,GUJNRECOKE,GUJARAT N R E COKE LTD,MOHSIN MIYANA,SELL,4250000,19.50,-
20-MAR-2009,NITINFIRE,Nitin Fire Protection Ind,BP FINTRADE PRIVATE LIMITED,SELL,86485,186.87,-
20-MAR-2009,SHYAMTEL,Shyam Telecom Limited,BP FINTRADE PRIVATE LIMITED,SELL,58779,55.54,-
20-MAR-2009,SHYAMTEL,Shyam Telecom Limited,VIJIT ASSET MANAGEMENT PRIVATE LIMITED,SELL,61633,57.03,-
20-MAR-2009,SREINTFIN,SREI Infrastructure Finan,CALLIDORA MERCANTILES PRIVATE LIMITED,SELL,750000,29.98,-"Trade the trend...never ever try to counter trade the trend (especially without well calculated wise strick SL) it is more dangerous then gambling on tossing a coin"
For those who still thinks or believes..stock market is a genuine game...
Courtesy:
http : // www. indiabulls. com / securities / market / market_information / Bulk_Deals.aspx
For those who still thinks or believes..stock market is a genuine game...
Courtesy:
http : // www. indiabulls. com / securities / market / market_information / Bulk_Deals.aspx
Hello Friend.
How aptly put. I am a relatively new trader since december 08 only and I have observed the phenomina almost every day since them. You have already mentioned the case of Educomp, else I would havce definately mentioned it and also the Raju letter know to the general public only in the afternoon. Another case is that of Akruti in the past month when the stock started from 750 odd and reached 2300 in 4-5 days. Absloutely impossiable without any relevant news and also that of RIIL vary lately. Akruti was fun while it lasted and was good money machine. I was alert to get out of the stock just a day before it crashed. There are ample examples everyday to watchout for. I liked the quote one mentioned on Warren Buffet. Had a whole hearted laugh, even now, LOL!
Since I'm a full time broker myself, I've observed some very small and keen nitty gritties of this markets. It's a very good thread you have here. Good Job! Will keep posting as and when I have valuable inputs.
Oh BTW what does the name mean or represent "ACTUARYINMAKING". Give me a nick to address you. Mines's McNish. So Long !
How aptly put. I am a relatively new trader since december 08 only and I have observed the phenomina almost every day since them. You have already mentioned the case of Educomp, else I would havce definately mentioned it and also the Raju letter know to the general public only in the afternoon. Another case is that of Akruti in the past month when the stock started from 750 odd and reached 2300 in 4-5 days. Absloutely impossiable without any relevant news and also that of RIIL vary lately. Akruti was fun while it lasted and was good money machine. I was alert to get out of the stock just a day before it crashed. There are ample examples everyday to watchout for. I liked the quote one mentioned on Warren Buffet. Had a whole hearted laugh, even now, LOL!
Since I'm a full time broker myself, I've observed some very small and keen nitty gritties of this markets. It's a very good thread you have here. Good Job! Will keep posting as and when I have valuable inputs.
Oh BTW what does the name mean or represent "ACTUARYINMAKING". Give me a nick to address you. Mines's McNish. So Long !
[ markets never beat anybody, we beat ourselves[/QUOTE]
There is a lot of learning and wisdom in what Actuaryinmaking has posted and your words quoted above.I feel it is rather more difficult to overcome greed and fear than learning the technicals.I ackwnoledge the contributors in this thread which makes you think twice before pressing the buy or sell trigger as the case may be.
There is a lot of learning and wisdom in what Actuaryinmaking has posted and your words quoted above.I feel it is rather more difficult to overcome greed and fear than learning the technicals.I ackwnoledge the contributors in this thread which makes you think twice before pressing the buy or sell trigger as the case may be.
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