In most WSJ articles that highlight where the markets went for the day, they’ll mention what sectors led or lagged. For example, it’ll say, “banks led the way as traders dumped retail.”
1) what traders are they talking about? S&T? HF?
2) why will retail be down that day and then up the next? There’s no fundamental analysis done then, because you aren’t looking long term? So why is Nike good one day and then bad the next, if they aren’t looking to hold long?
1) S&T traders are pretty much all market makers now. So they're referring to buy side (i.e. asset managers, HF, investors etc.) Usually they will go to the bank for a two way price and then trade on it (i.e. bank will warehouse that risk). Obviously the market makers can then clear risk on exchange or other venues and that has a knock on effect i.e. market will go lower if every buy side client will sell to the S&T traders.
2) Stocks move on diff factors on a daily basis, sometimes its company specific, industry specific, sometimes its market led (i.e. s&p 500 is up and Nike gets dragged up with it). Sometimes its even technical (i.e. quant firms loading up because they think it is oversold when looking at price history). Finally a lot of it is market positioning, i.e. short squeezes etc etc
makes sense, thank you!
The simpler answer to #1 - everyone participating in a market is trading. If a stock goes up there are more shares to buy than sell at a given price. Vice versa dor stocks going down.
And on #2, a lot of it is noise. How many days a year does the market go up (or down) on average?
generally goes up a little more than down? but around the 50% mark?
This might be a stupid question, but say a HF wants to buy 1,000,000 shares AAPL:
Can the firm execute the trade themselves like we retail traders do in our retail brokerage app? if not, why? (e.g. liquidity problems, transaction fee)
If they want to use banks services (i.e. sell-side traders), do they literally call up every bank on the street and ask for quotes? Or do they already have one particular bank they prefer to do business with?
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