More Sellers than Buyers
Results 1 to 8 of 38

Thread: More Sellers than Buyers

  1. #1
    I hear this frequently. That there were more sellers than buyers - or I hear there were more buyers than sellers. I also hear that this is an impossible statement because for every seller there must also be an individual buyer.

    Which is true? How does this work?

    Thanks,
    cm

  2. #2
    Are you sure your broker is on the side of your transaction? If, this is so, then it is in your interest for you to shed (as much as your broker is concerned). I always thought they made money just.

    Taking the contrary position to me seems somewhat unethical? Or am I way off here?

  3. #3
    Quote Originally Posted by ;
    Are you sure your broker is on the opposite side of your transaction? If, this is so, then it's in your interest for you to lose (as much as your broker is concerned). I always thought that they made money only on the spread.

    Taking the contrary place to me sounds somewhat unethical? Or am I way off here?
    This is how all market makers operate, they are implanted there to take the other side of your trade....Think of how the Nasdaq operates, via a bunch of market makers for each traded stock on the exchange, they have to generate a profit in the spread because they are not granted commissions by the exchange. . .This is 1 way why being recorded on the Nasdaq is much easier than being listed on the NYSE....

    It's not an issue of moral or not, it is an issue of rules..These would be the principles, play them nicely....


    Thanks,

    Nader

  4. #4
    Quote Originally Posted by ;
    I hear this frequently. That there were more sellers than buyers - or I discover there were more buyers than sellers.
    This is a bit of a inside joke with traders. When someone says hey, why did this stock go up some jokester will constantly shout since there are more buyers than sellers! . Its only a play on the supply and demand forces that go every market. When you think about it, more buyers than sellers is always the motive anything goes up in price, not only the financial markets.

    And yes there will have to be one buyer for each vendor in commodity markets, but the term has more to do with more buyers than sellers at a particular PRICE.

  5. #5
    Quote Originally Posted by ;
    Here is how all market makers operate, they're implanted there to take another side of the trade....Think of how the Nasdaq operates, through a bunch of market makers for every traded stock on the exchange, they have to generate a profit from the spread since they're not granted commissions by the exchange. . .This is just 1 way why being recorded on the Nasdaq is much easier than being listed on the NYSE....

    It is not a matter of moral or not, it is a matter of rules..These are the rules, play them nicely....


    Thanks,

    Nader
    Nader

    I love the reply - I am still a novice and finding my feet here.

    Would not that mean, if an individual market manufacturer (broker) for example always loses (i.e. you are long term profitable) that you are a loss to them? Why wouldn't they just terminate your account? After all... you would be losing them money... no broker wants this! I figure terminating the account is unethical

    I asked concerning brokers, but from your answer I assume that Market Makers include the brokers .

  6. #6
    Quote Originally Posted by ;
    Nader

    I love the reply - I'm still a beginner and finding my feet here.

    Wouldn't that imply, if a single market maker (broker) for example always loses (i.e. you're long term profitable) which you're a reduction to them? Why not they just terminate your account? After all... you'd be losing them cash... no broker would like that! I figure terminating the account is dishonest

    I asked about brokers, but in the answer I assume that Market Producers incorporate the brokers themselves.
    Hello Nader,
    I'm sure there is more to this than what I am going to say. I'v never attempted it
    Before you can become a Forex Broker, You have to prove financial security for a Market Maker. Ie All Fx Br_kers are MM's with all the capacity to cover'x' amount of contracts trades.

    The freedom that this gives them is the ability to determine at exactly what price currently they are willing to buy/sell any specific pair. If they're a yard away from other MM's, they will be goals of those which are presently discussing the possibility of Arbitrage Trading buy from MM'A' and market to MM'B' and maintain the gap This is consequently itself policing policy which keeps them in the exact same ballpark.

    That said, Statistics show that 95% of Spec traders are bankrupt and out of the game in 3 weeks. such as the unemployment amounts, I'm not positive whether that is the identical man who just wont give up and keeps opening new accounts
    MM's have no requirement for any bad publicity which may say I was winning, so they shut me down. Unless of course you've got a very large account and therefore are investing based on something aside from pure price movement in their house. such as arbitrage

  7. #7
    Hi there
    It's Ed here, Nader kindly answered my very first post!

    As for arbitrage, thats a valid point, however a trader cannot arbitrage since they may only work within their broker?

    Would be good to buy from Broker A, and sell to Broker B!

    That will however raise the possibility of pseudo-arbitrage scalping???

    Get the price off a faster feed, and then buy from your slower first feed broker, wait for the pip difference to reveal and then sell... I figure if you guys have thought about the trick a long time ago.

  8. #8
    Quote Originally Posted by ;
    I hear this frequently. That there were more sellers than buyers - or I discover there were far more buyers than sellers. In addition, I hear that this is an impossible statement because for every seller there should also be an individual buyer.

    That's true? How does this work?

    Thanks,
    cm
    Your Broker is on the other side of your transaction, my trade all the rest of their clients trades. [let's just say they've 98 more customers and you and I]
    If we all decided to sell,
    Sellers = 100
    Buyers = 1
    Volume = Sum of all Lots sold by 100 Sellers.
    Open Interest = Amount of Lots sold by 100 Sellers.


    Let us look at Commodity Futures [Globex may help explain it more.]
    You want to Sell 10 Lots.
    Your broker matches you up with someone who disagrees with you.
    Perhaps that's actually two people who both take 5 lots each.
    Sellers = 1
    Buyers = 2
    Volume = 10
    Open Interest = 10

    It moves your way you choose to take some profit by Buying 5 Back.
    The other two guys want to hold onto theirs and wont sell them .
    Along comes the third man and he is prepared to take a Short position sohe sells them .
    Sellers = 2
    Buyers = 2
    Volume = 15
    Open Interest = 10

    And so on and so on.

    Notice the Open Interest didn't change. That's because there are only 10 contracts available with Traders on both sides of them. Guy #3 is currently on the other hand of guy #1 or man #2.
    Open Interest simply counts the Open Contracts. Perhaps not the ebb and flow of possession does.

    Hope it helps.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
This website uses cookies
We use cookies to store session information to facilitate remembering your login information, to allow you to save website preferences, to personalise content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners.