http://wheredoesallmymoneygo.com/market-impact-and-small-cap-stocks/ A personal finance blog written by Preet Banerjee Sat, 11 Feb 2012 16:22:10 +0000 hourly 1 http://wordpress.org/?v=3.1.2 http://wheredoesallmymoneygo.com/market-impact-and-small-cap-stocks/#comment-2213 New Canadian Small Cap ETF Available : WhereDoesAllMyMoneyGo.com Mon, 29 Mar 2010 01:24:09 +0000 http://www.wheredoesallmymoneygo.com/?p=911#comment-2213 [...] This is one area where CNDA might have an advantage. It looks like CNDA has a higher market capitalization minimum for inclusion – meaning that companies have to be of a certain size and if they are too small, they are excluded from the index. If there are days when there is a lot of buying or selling pressure on both of these ETFs, CNDA’s index is less likely to suffer from capacity constraints (meaning that the smallest names won’t have their prices materially affected by large purchases and sells). For more explanation on “capacity” or “market impact” click here. [...] [...] This is one area where CNDA might have an advantage. It looks like CNDA has a higher market capitalization minimum for inclusion – meaning that companies have to be of a certain size and if they are too small, they are excluded from the index. If there are days when there is a lot of buying or selling pressure on both of these ETFs, CNDA’s index is less likely to suffer from capacity constraints (meaning that the smallest names won’t have their prices materially affected by large purchases and sells). For more explanation on “capacity” or “market impact” click here. [...]

]]> http://wheredoesallmymoneygo.com/market-impact-and-small-cap-stocks/#comment-2212 Preet Tue, 11 Nov 2008 04:23:16 +0000 http://www.wheredoesallmymoneygo.com/?p=911#comment-2212 @Finance: There are only so many buyers/sellers, so if you place a large order you can chew through the bids/asks quite quickly. Lower liquidity stocks with thin market depth will be especially vulnerable. @Finance: There are only so many buyers/sellers, so if you place a large order you can chew through the bids/asks quite quickly. Lower liquidity stocks with thin market depth will be especially vulnerable.

]]> http://wheredoesallmymoneygo.com/market-impact-and-small-cap-stocks/#comment-2211 Finance Mon, 10 Nov 2008 11:49:58 +0000 http://www.wheredoesallmymoneygo.com/?p=911#comment-2211 It seems that the impact of transactions on stock price (market impact) is a function of the size of the order. Any theory that suggests why this is so? It seems that the impact of transactions on stock price (market impact) is a function of the size of the order. Any theory that suggests why this is so?

]]> http://wheredoesallmymoneygo.com/market-impact-and-small-cap-stocks/#comment-2210 Preet Thu, 23 Oct 2008 02:16:47 +0000 http://www.wheredoesallmymoneygo.com/?p=911#comment-2210 @Michael James - Thanks and you make a good point. Further, what is even more interesting is that even with this hurdle he has managed to deliver extraordinary results. @Michael James – Thanks and you make a good point. Further, what is even more interesting is that even with this hurdle he has managed to deliver extraordinary results.

]]> http://wheredoesallmymoneygo.com/market-impact-and-small-cap-stocks/#comment-2209 Michael James Wed, 22 Oct 2008 09:06:18 +0000 http://www.wheredoesallmymoneygo.com/?p=911#comment-2209 Nice explanation of market impact. This provides background for Warren Buffett's claim that his universe of potential investments shrinks as his pile of money increases. Nice explanation of market impact. This provides background for Warren Buffett’s claim that his universe of potential investments shrinks as his pile of money increases.

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