stock market rework et etc. (new shares&new bonds)

Banking and Finance DLC for Capitalism Lab
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colonel_truman
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stock market rework et etc. (new shares&new bonds)

Post by colonel_truman »

Hello.

I´ve been reading about some need to make the stock market work differently (http://www.enlight.com/forum/viewtopic.php?f=52&t=5099).
I have an idea that could change how the stock market works ATM, and two more issues (at least): new shares and new bonds.

After reading about the new features being introduced in the new banking dlc I think the devs could miss an opportunity to rework how this financial stuff could function in a better way. Just guessing, so there it goes:

a) Right now we have a stock market that uses financial statements to fix the price, plus a bit of random noise that pushes the price up and down. It´s not fixed as it is (in an auction).

b) We also have new shares. They are autom. bought by the "public shareholders" and I believe this is just a practical workaround.

c) We´ll have bond issuance in the new dlc and I´m guessing it will work the same way: they´ll be bought by "public bondholders" and then we´ll have the secondary market to buy the bonds from these "public bondholders".

Now, how the price in the stock market could go up and down, with an example:
a) You are willing to buy x shares in a company for 100$. You place a public order that all can see. That order takes the place of "public shareholders". If nobody sells to you in "time A" (one day?) the price goes up, let´s say to 101$.
At 101$ nobody sells, so the price goes to 102$, after one day... and then you find someone selling 100 shares to you for 102$.

b) For a week nobody is buying or selling (no orders), so the price stays fixed at 102$.

c) Somebody wants to sell 100 shares at 102$ after 1 week and nobody buys, so the price drops to 101$, ...... etc.
The price has nothing to do with financial statements or how a company´s doing, but with the will of investors (as in truth).

I propose that a) new shares and b) new bonds be first plublished and if you are, i.e, selling them you don´t get the cash until someone "real" buys them.
If they won´t, the price will drop, and vice-versa.

In the same way, the stock market will publish the orders to buy or sell by "real actors", instead of having a bag of "public shareholders" to absorb the transactions. After each day the price will move up or down depending on the side that didn´t get their orders filled (buying side UP or selling side DOWN).
Regards.
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