Re:Coinbase announces proposed direct listing
by bluedevil2k on Friday January 29, 2021 @10:42AM
(#25958378)
That’s a contrived example though. Say you put 200 shares at $50. If the clearing price is $50, you’ve won 300 shares at $50 - $15,000 total. What if you only have $10,000?
I’m saying it’s difficult to a) allow bidders to enter a demand curve b) respect their budget limitations c) keep it easily understandable for bidders.
Re:Coinbase announces proposed direct listing
by harryh on Friday January 29, 2021 @12:05PM
(#25959588)
Why would you put 200 shares at $50 and 100 shares at $100 if you only had a $10,000 budget? That's misrepresenting your actual demand curve.
Are you saying that an auction of this kind is a bit complicated, and it's possible to make a mistake? I suppose that might be true, but that is a very different assertion from your original position:
"since people had to enter a single point on their demand curve as a price and quantity of shares (instead of their entire demand curve)"
100 shares at $100
100 shares at $50
This will satisfy your demand curve.
In a direct listing, the initially listed shares will all transact at the same price (the clearing price).