Mystery 'Dude' Rattles Turkish Stock Traders With Massive Bets
bloomberg.com
bloomberg.com
1) The title is pretty misleading, the identity is known to regulators. Most funds will use a sell side bank who has access to the market to put their orders out. Especially for a country like Turkey where it doesn't make much sense to buy your own pipe.
Its just the rest of the market who doesn't know the identity of the firm. This is common in all countries.
2) Developing countries markets almost always have very little liquidity so its not surprising for a firm to come in with a global macro view and move hte market when trying to put their position on.
In fact its the one place where people still act like the opening scene, atleast I think it was the opening scene, from Liar's Poker (http://www.amazon.ca/gp/product/B003E20ZRY/) where the trader tries to bully the market by deciding bonds should go up so he buys a whack of them and then when the market fails to move he doubles down on his bet and buys more causing the rest of the market to go along with him.
You can't really strong arm developed world markets but you still can bully developing countries markets in this way. You are essentially playing chicken.
The problem is always how do you close your position. If buying so much moves the markets then its obvious that selling will also do the same. usually you are forced to sell your position to a big sell side firm who can take the exposure.
I think it's unlikely that the new market actor(s?) are taking big directional bets (although it's certainly possible). I think it's more likely that they're market-making or executing futures or index arbitrage strategies (in which case, what would look like a directional bet in the cash equities market would be offset by a corresponding trade in another security or derivative.
"Yatırım Finansman (YF Securities), Turkey's first brokerage house, was founded on October 15, 1976 by 13 major banks led by Isbank and the Industrial Development Bank of Turkey (TSKB)."[+]
[+] http://www.yf.com.tr/YF/en/about-us/yf-securities-in-brief.a...
And that's all I've got. Could be pretty much anyone, clearly.
Well. Anyone of the top 0.01% or so, if you want to narrow your search down a tad.
Now, that being said, the political situation there right now is increasingly hellish. What's going on there now is the result of a very long game that has been played out since before the modern Turkish republic, founded by Ataturk.
The dude abides, indeed.
edit: now they did :D
Most reporting on the markets is really, really boring when you get right down to it. "He's high-frequency trading! And placing big, risky bets! And who even knows if it's a he?!" sells a lot more papers than "Investment fund purchases stock legally on the open market; chooses not to broadcast intention to do so by using smoke signals but instead uses a computer."
It is very difficult for me to credit a market maker with that sort of impact on net buys, unless the market maker is very, very, very bad at their job.
On smaller exchanges with less liquidity you see it all the time. If average trading volume is 20k shares, buy 50k and you will move the price. Then sell in small blocks, maybe through multiple brokers...
In the reality most of us inhabit, a 401k is a type of company-sponsored retirement account. The accounts are allowed to invest in a variety of securities, most commonly in one of a limited selection of mutual funds. There is no circumstance under which 401k contributions materially move the market.
If I sound mildly put out in this comment, it is because HN comments about the stock market often make very confident claims which bear only the most tenuous connection to reality. It's as if someone on a Wall Street message board had asked "Why is Chrome faster than Internet Explorer?" and received the answer "Because it is written in Unicode."
And outside the scope of this particular comment, often times responses like "Chrome is not, in fact, written in Unicode. Unicode is an imprecise name for part of a family of methods of encoding text in various human languages, not a programming language. A substantial part of Chrome, including most of the rendering engine, UI layer, and network stack is written in C++; Chrome also makes heavy use of other languages internally. Returning to the question of why Chrome is fast: this is less about language choice and more because substantial effort has been taken to ensure that Chrome is fast. 'Fast' is a complicated topic in browsers. In terms of user-visible performance, one thing which makes browsers seem fast is the Javascript runtime. Chrome uses V-8, a run-time built specifically for Chrome at the cost of hundreds of millions of dollars, which is optimized for speed." are met with "Sure that's what you would say IF YOU WERE A GOOGLE SHILL."
Some companies have 401ks plans that are working with very large sums of money. This problem doesn't apply to all 401ks. This wasn't the best example.
Um... not sure what to do with your comments on the shill ecosystem.
Here is Fidelity's Contrafund summary: https://fundresearch.fidelity.com/mutual-funds/composition/3...
FACEBOOK INC A BERKSHIRE HATHAWAY INC CL A WELLS FARGO & CO ALPHABET INC CL A APPLE INC AMAZON.COM INC ALPHABET INC CL C VISA INC CL A STARBUCKS CORP NIKE INC CL B % of Total Portfolio 31.30%
I guess a worst case scenario is one of the core assets went out of business. The asset portfolio doesn't stay static- if you look at the site above, it says that these are the assets as of a specific date.
Also, on a typical exchange like the NYSE, HKex, Euronext Paris, etc..., the volume is so large you generally don't even bother to look at who's buying or selling. On smaller exchanges you're constantly glued to the screen, looking at the sellers, trying to guess what they're up to.
I imagine company 401ks are managed by in a fairly conservative way. Big positions in fundamentally solid large caps, holding for a long time, selling only when you need to cash out or the price moves beyond a certain range. Traders basically manage their trades in the exact opposite fashion - short, extremely speculative trades, no regard for fundamentals, on smaller exchanges you mess with people's emotions, etc...
Not many people have $160m to throw around on the Turkish stock exchange. It's a riskier market than the more established western ones.
50p says it's an investment bank or hedge fund familiar to most people who know something about this area, and the people involved might be surprised themselves to find liquidity is so low that they are market making.