Ken Griffin’s Hand-Picked Math Prodigy Runs Market-Making Empire

Re:Ken Griffin’s Hand-Picked Math Prodigy Runs Market-Making... by HWR_14 on Tuesday May 16, 2023 @11:15AM (#35962987)

In your theory, there is no cost to servicing loans (on both sides), foreclosing on an asset or long term lockup of capital in not perfectly liquid markets. Or other uses for shares (eg exerting corporate control) absent receiving dividend streams.

[ Parent | on HN ]

Re:Ken Griffin’s Hand-Picked Math Prodigy Runs Market-Making... by anonymouskimmer on Tuesday May 16, 2023 @11:47AM (#35963484)

With the exception of corporate control, this is covered in my final sentence.

[ Parent | on HN ]

Re:Ken Griffin’s Hand-Picked Math Prodigy Runs Market-Making... by HWR_14 on Tuesday May 16, 2023 @12:25PM (#35964106)

None of my costs had to do with middlemen.

[ Parent | on HN ]

Re:Ken Griffin’s Hand-Picked Math Prodigy Runs Market-Making... by anonymouskimmer on Tuesday May 16, 2023 @12:33PM (#35964239)

Loan servicing costs only exist because of middlemen. If two people directly interface for a loan there is no additional cost (other than the cost of transportation, which only exists because a middleman is charging for gas and car maintenance).

Foreclosing on an asset doesn't happen in my example is not a cost, but a risk, which the interest rate should be accounting for.

Longterm lockup of capital is not a problem, as either party in my example are financially gaining regardless.

And I granted you the other uses for shares, which technically can be done without buying the share, but at a middleman cost (renting the share).

I really don't care to continue this. Mine was just a hypothetical in favor of the idea that there's always a "loser" (when compared to all possible financial alternatives) in stock trades, even if everyone ends up happy with the trade. Sure, there are holes in the hypothetical. I don't care.

[ Parent | on HN ]