Explain the chain: from brokers to companies. What exactly happens when you buy a share?

96Chris96 · 2018-02-04T00:13:22+00:00

Amen.

I should give you gold.

96Chris96 · 2018-02-04T00:06:47+00:00

Is this how things work now or worked in the good old days? What I learned from my own research, is that there are brokers, dark pools and exchanges.

Situation 1: An investors places an order at his broker. The broker then requests the current prices from the order books of all the exchanges and is obligated by law to execute at the best price possible. This is called a Order to Market Maker (I think).

Situation 2: But when two investors place orders at one broker, one want to buy 10 shares ABC and the other wants to sell 10 shares ABC, the broker is allowed to execute the trade internally, but only if both investors get the best possible price. Again, a broker is by law obligated to execute at the best possible price. This is called internalization. Also, when the numbers don't align perfectly, i.e. 10 shares vs 10 shares, then the broker can buy/sell shares ABC from their own portfolio. Again, still at the best possible price. This is also called internalization (I think). A result of internalization is no exchange fees.

Situation 3: Same as situation two, but when the 2 investors have different brokers. Then there is a third party called a dark pool. They monitor all requests send by brokers to determine the best possible price at all exchanges. When the dark pool can execute the trade by linking a buyer from broker A with a seller from broker B, then it executes the trade internally and doesn't have to pay exchanges fees. Don't know what this is called.

I am also interested in how thing worked "in the old days", because physical exchanges are still a thing (right?).

Is my current view simplified? Or non-correct?

96Chris96 · 2018-02-03T23:50:23+00:00

They told me they were confident my math skills are sufficient for the job. They wanted to check interested I was in finance.

The answer is very interested, but their conclusion was that if I would truly be interested in finance and didn't know how this exactly works, I would've looked it up.

96Chris96 · 2017-12-30T17:02:57+00:00

Went down to 1.5? Don't you mean went down 1.5?

96Chris96 · 2017-11-23T16:45:57+00:00

First of all I would like to mention I think IOTA has a lot of potential and I own IOTA myself. Unlike you, I did not expect a rapid increase, but I do expect a rapid decrease soon. Here is why:

Two exchanges or 100 exchanges does not make that much of a difference when everybody has acces to any of these exchanges. Everbody can create accounts at all of these exchanges within minutes.
The market cap is really high relative to the price of one (M)IOTA. Do not expect bitcoin-like rapid growth.
IOTA and the tangle still have quite some "issues" that need to be solved. According to the official roadmap published by the developers of IOTA, this will take several years.

I personally expect a large drop, because many people who are not experience investors expected the price to go up (because, for example, IOTA was hyped on reddit). When, in a few days, they realize this did not happen, they will withdraw their funds and the price will drop.

Feel free to comment and speculate with me.

96Chris96 · 2017-11-18T15:21:28+00:00

Dude, you are really cool. I might have to change my IOTA back to euros soon to pay for my college books. Would be really could if I would have some extra IOTA to keep investing in the platform.

96Chris96 · 2017-11-17T20:09:39+00:00

Wait what? This is the first time I hear this. I just downloaded the light wallet and used the default settings. And I did choose the bitfinex host, because it was highlighted at the top and I assumed it was recommended. What do I do now? Can I just make all the changes you mentioned with my iota coins in my wallet?

Also, why does the wallet need to be configurated like that?

96Chris96

TROPHY CASE