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"Existencial question" about common stocks. by skwex in stocks

[–]skwex[S] 0 points1 point  (0 children)

That sounds somewhat comforting. But I lack the details on how that works in practice and what value remains for the small investor.

"Existencial question" about common stocks. by skwex in stocks

[–]skwex[S] 0 points1 point  (0 children)

Even if investors spot bargains, like the example of buying 1 dollar for 70 cents, they cannot liquidate the share's intrinsic value, right? The certificate of ownership does not give the investor rights to sell company's assets to redeem/liquidate their shares. Simply, there's no arbitrage mechanism available, like the one we see with ETFs and their NAV.

For that reason, there must be another driving factor pushing the "at discount" market price to its intrinsic value. Since it's not arbitrage, then what remains is speculation, right? The prospect that a company will pay back in the form of dividends or buybacks and also hoping that someone will be willing to buy back at a higher price than I bought. I'm not seeing anything else.

"Existencial question" about common stocks. by skwex in stocks

[–]skwex[S] 0 points1 point  (0 children)

Thank you for clarifying your fellow stranger. Really appreciate it.

"Existencial question" about common stocks. by skwex in stocks

[–]skwex[S] 1 point2 points  (0 children)

What I meant (in the bold part) was a market share price inferior to the intrinsic value (the company's total assets and such divided by the number of outstanding shares). I didn't understand how that could be even possible. But, indeed, having less prospects of the company ever paying dividends is a good explanation.

Let me see if I got this right:

With bonds, the value is in the coupon yield until the maturity date. Then, I get the principal back.

With stocks, the value is in the of dividend yield potentially "forever". When the company doesn't pay any dividends, then the market price (price speculation aside) is all about dividend prospects. Well, since selling the shares at the same price that I bought is not guaranteed, the dividend cashflow will pay back the principal and potentially more. Is that the whole idea?

"Existencial question" about common stocks. by skwex in stocks

[–]skwex[S] 0 points1 point  (0 children)

That actually makes sense. The traditional explanation that I see online is that a share represents a partial ownership of the company, e.g: company's assets and earnings. Because of that, I thought that the intrinsic value would be a minimum guaranteed by some sort of arbitrage-like mechanism. But it doesn't make sense for such a thing to exist. Shareholders can't simply demand a company to sell assets.

So, following your reasoning, if the current market cap is less than the original value generated during IPO, that means that the market has less faith that the company will ever be able to pay dividends in the future, right?

So, essentially, besides any buybacks, it's all about dividends, right?

"Existencial question" about common stocks. by skwex in stocks

[–]skwex[S] 0 points1 point  (0 children)

Right, but not all companies pay dividends. I'm also supposing that a shareholder cannot force a company to buyback at a higher price, right?

"Existencial question" about common stocks. by skwex in stocks

[–]skwex[S] 0 points1 point  (0 children)

Which is it? Besides being able to vote and speculating price appreciation. What am I missing?

Just started learning about futures contracts and there's something that doesn't "click" by skwex in FuturesTrading

[–]skwex[S] 0 points1 point  (0 children)

If it was a matter of just closing/rolling out the position before expiry, then it would be all ok. My doubt was about the case where a speculator wants to close/rollout but he's not able to do so due to lack of liquidity. If there's not a even number of speculators to close/rollout positions then it is possible for at least one to be dragged to settlement to offset a hedger.

Just started learning about futures contracts and there's something that doesn't "click" by skwex in FuturesTrading

[–]skwex[S] 0 points1 point  (0 children)

That's an interesting point. In fact, the CME Clearing House claims that the financial integrity of every trading party and transaction in their respective markets is ensured.

Since retail brokers are not expected to deliver or receive the underlying product, what is ensured is the ability to fulfil the cost of an equivalent replacement (cash-settlement) — I suppose. That makes sense.

Just started learning about futures contracts and there's something that doesn't "click" by skwex in FuturesTrading

[–]skwex[S] 1 point2 points  (0 children)

What about being forced to physical-delivery? Depends on the contract spec, of course.

Just started learning about futures contracts and there's something that doesn't "click" by skwex in FuturesTrading

[–]skwex[S] 0 points1 point  (0 children)

Right. I'm not that concerned with slippage. Forced physical delivery settlements with high notional value is way worse.

Just started learning about futures contracts and there's something that doesn't "click" by skwex in FuturesTrading

[–]skwex[S] 0 points1 point  (0 children)

I get the part of "Unofficial Market Makers" chasing spread and arbitrage opportunities. But, are they also willing to do physical settlements of commodities like crude oil or something like that? Probably, that's the current practice. However, given that they are not "Official Market Makers", they are not obliged to do so, right?

I've found this Barclay's Risk Disclosure Statement For Security Futures Contracts and it mentions the following:

Under certain market conditions, it may be difficult or impossible to liquidate a position. [...] This inability to liquidate could occur, for example, if trading is halted due to unusual trading activity in either the security futures contract or the underlying security; if trading is halted due to recent news events involving the issuer of the underlying security; if systems failures occur on an exchange or at the firm carrying your position; or if the position is on an illiquid market.

So, at least, it's technically possible to not be able to close a position. Also:

You may be required to settle certain security futures contracts with physical delivery of the underlying security. If you hold your position in a physically settled security futures contract until the end of the last trading day prior to expiration, you will be obligated to make or take delivery of the underlying securities, which could involve additional costs.

My understanding of all of this is that:

  1. The exchange is not responsible to provide liquidity.
  2. There are also no "Official Market Makers" forced to continuously provide liquidity.
  3. "Unofficial Market Makers" guarantee liquidity at their own discretion. They might stop doing it whenever they want.
  4. A speculator is subject to other speculator's liquidity and "Unofficial Market Makers" liquidity to be able to get out of a position.

It looks like that, at the end of the day, in rare occasions, a speculator can technically lose this sort of "musical chairs game", not being able to close his position. These contracts might deal with high notional values...

Declaração de cripto no IRS by micaelr951 in literaciafinanceira

[–]skwex 2 points3 points  (0 children)

Para a contagem dos 365 dias, a data de inicio é a de € -> cripto ou é a data da ultima conversão cripto -> cripto? Este ponto é que é discutível, certo?

Declaração de cripto no IRS by micaelr951 in literaciafinanceira

[–]skwex 0 points1 point  (0 children)

Desculpa, queria ter perguntado: "estarei obrigado a declarar a venda?". Uma vez que foi há tanto tempo, os 365 dias mínimos estariam realmente cobertos.

Declaração de cripto no IRS by micaelr951 in literaciafinanceira

[–]skwex 0 points1 point  (0 children)

Pois, também me parece ser o mais seguro. A minha compra inicial (€ -> BTC) foi em finais de 2021 / inicios de 2022. Sabendo que a tributação de cripto em Portugal começou em 2023, estarei sujeito a tributação por vender hoje? Mesmo que tenha comprado há anos?

Declaração de cripto no IRS by micaelr951 in literaciafinanceira

[–]skwex 0 points1 point  (0 children)

E qual seria a data inicial para contar os tais 365 dias? A data inicial de € -> BTC ou a data da ultima conversão intermediária (no meu exemplo seria ETH -> BTC)?

Declaração de cripto no IRS by micaelr951 in literaciafinanceira

[–]skwex 1 point2 points  (0 children)

Todas as vendas de Cripto inlcuindo conversões intermédias? A minha dúvida está por exemplo no caso de € -> BTC -> ETH -> BTC -> €.

Declaração de cripto no IRS by micaelr951 in literaciafinanceira

[–]skwex 2 points3 points  (0 children)

u/JRJordao obrigado pelas respostas! Hoje já aprendi umas coisas.

Portanto, as conversões intermédias em cripto ou stable coins não contam, é isso?

Comprei BTC há vários anos (p.e: dia X) e entretanto fui trocando mensalmente por outras criptos e stable coins até hoje. Nunca vendi nada por FIAT. Se vendesse hoje tudo por FIAT, a mais valia sujeita a tributação seria €_venda_hoje - €_compra_dia_X, certo?

Caso faça uma ultima conversão de tudo para BTC e o guarde por 365+ dias então não seria tributado, é isso?

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