right now I might buy, then explain, in the hope that other people will believe me, also buy, and I can sell high
I think this would still work, as long you donât explain before your buy order goes through đ
if trades are public like manifold right now, this might result in trading strategies like âmimic the most successful tradersâ becoming plausible
I think this is right, because you could copy a successful trader in the same transaction they are buying in, so they would lose their first mover advantage (previously people could copy, but only after they picked up shares at the best price). This would be a good reason to not have individual orders public, at least before a batch trade goes through.
Interestingly real stock markets donât have public orders for call auctions, they report an Indicative Match Price, and some kind of aggregated information about buy/âsell imbalance (details vary). Whereas for continuous trading orders are public. Presumably this is for a similar reason.
It would maybe create a bit of a free-rider problem, if you had a situation where valuable data could be acquired at a cost (by doing a survey or experiment, or having fast messengers to run to London from Waterloo), then you kind of get exploited by anyone who just copies you.
On the other hand, in the immediate (non-equilibrium) mode the âcopy the best traderâ strategy is helping the market make good predictions. If their really is someone out there who is making perfect predictions, then having a lot of money follow their lead is going to result in better predictions.
as long you donât explain before your buy order goes through
might even make sense to build this into the UI. noob-facing flavortext might be like âAfter-Trade Comment: make a comment that only becomes public after your order goes through, to explain your reasoning once youâve bet on it? if youâre honest and correct, and others know that, others might match your bet, allowing you to sell early if youâd like to de-riskâ
realizing that thereâs still incentive for timeliness that might be awkward. itâs still the case that the person who trades last has the best position to update off whatever information the order book provides. This might cause people to put fake orders in and change them last-minute. possibly avoidable by, eg, limiting how often you can change your order; perhaps for a 1 day call auction, you canât change your order more often than an hour after you placed it? perhaps this only makes sense for a limited period before the end of the call auction, eg if you have an order in the book 2 hours before it closes, you canât change that order. that limits the time period where someone has to come back to check if someone did a fakeout.
alternately, just donât provide any information from the unclosed call auction whatsoever; the price updates once a day, and you get no further information.
I think this would still work, as long you donât explain before your buy order goes through đ
I think this is right, because you could copy a successful trader in the same transaction they are buying in, so they would lose their first mover advantage (previously people could copy, but only after they picked up shares at the best price). This would be a good reason to not have individual orders public, at least before a batch trade goes through.
Interestingly real stock markets donât have public orders for call auctions, they report an Indicative Match Price, and some kind of aggregated information about buy/âsell imbalance (details vary). Whereas for continuous trading orders are public. Presumably this is for a similar reason.
It would maybe create a bit of a free-rider problem, if you had a situation where valuable data could be acquired at a cost (by doing a survey or experiment, or having fast messengers to run to London from Waterloo), then you kind of get exploited by anyone who just copies you.
On the other hand, in the immediate (non-equilibrium) mode the âcopy the best traderâ strategy is helping the market make good predictions. If their really is someone out there who is making perfect predictions, then having a lot of money follow their lead is going to result in better predictions.
might even make sense to build this into the UI. noob-facing flavortext might be like âAfter-Trade Comment: make a comment that only becomes public after your order goes through, to explain your reasoning once youâve bet on it? if youâre honest and correct, and others know that, others might match your bet, allowing you to sell early if youâd like to de-riskâ
realizing that thereâs still incentive for timeliness that might be awkward. itâs still the case that the person who trades last has the best position to update off whatever information the order book provides. This might cause people to put fake orders in and change them last-minute. possibly avoidable by, eg, limiting how often you can change your order; perhaps for a 1 day call auction, you canât change your order more often than an hour after you placed it? perhaps this only makes sense for a limited period before the end of the call auction, eg if you have an order in the book 2 hours before it closes, you canât change that order. that limits the time period where someone has to come back to check if someone did a fakeout.
alternately, just donât provide any information from the unclosed call auction whatsoever; the price updates once a day, and you get no further information.