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209705
Informed Traders
Description
Bachelor's degree Trading and Dealing (Informed Traders) Mind Map on Informed Traders, created by Vhia Rose on 15/09/2013.
No tags specified
informed traders
trading and dealing
trading and dealing
informed traders
bachelor's degree
Mind Map by
Vhia Rose
, updated more than 1 year ago
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Created by
Vhia Rose
about 11 years ago
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Resource summary
Informed Traders
Speculators who acquire and act on information about fundamental values
They don't make easy profits...
Their trading influences others to trade which may reduce prices (and profits)
Sellers require higher prices from informed traders (so profits decrease)
Trades carry information about prices to others
Fundamental values
The general equilibrium price given by all info = fundamental value of an asset and noise
Strategies
Minimise price impact to maximise profit
Aggressive trading
Stealth (slow) trading
Styles of informed trading
Value traders
Pyramid shaped organisations w/ variety of experts
Economic models for estimation
Large databases of info
Ultimate liquidity suppliers
News traders
Flat organisational structure
Quick trades before prices adjust
Electronic news services
Information-oriented technical traders
Identify recurring price patterns
Econometric techniques for estimation
Not profitable in efficient markets
"Scavengers"
Arbitrageurs
Enforce the law of one price when transaction costs permit
Simultaneously buy and sell similar instruments
Announcements
Earnings Reports
Earnings per share
Sales growth
Future outlook**
Most important indicator
Affects prices the most
ASX
Takeovers/Mergers
Shareholder details
Company reports
Notice of meetings
Dividends
Sensitive? Trading halt
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