D.J., RE: Average trade cost to shareholder per 100 share trade is $48 (per WS records)
I have never heard this number before. Where do you get it?
Second, on this point, while it might cost $2 per share or even more to execute a trade of Berkshire Hathaway, that is rather irrelevant to the DELL discussion. Do you truly believe that average cost to execute a 100 share trade of DELL for a shareholder is $48?
And finally, note that most of the trading costs are execution costs for a shareholder. And while Wall Street does indeed gain some of the benefit of the spread, they do not gain a majority of the impact.
How are you coming up with $270K in relationship to total daily cost to the shareholder?
A penny a share.
Many times, the positions taken by various WS firms are masked relative to their own option activity. A net put position representing 40 million shares is not reported; only the long 25 million long position. So, if you have access to these firms option activity, then possibly you can tell us about it...
Most times, though, the positions taken by various Wall Street firms are by their asset management divisions.
Look at the trends. Wall Street firms are making a market is fewer and fewer stocks every year, primarily because the margins are almost nonexistent. The penny a share number that I use was generous.
On the other hand, everyone is trying to build up the asset management side of the business because margins there are still halfway decent. It is clear to me that Wall Street benefits if stocks (and DELL) go up. Just look at the income in good markets vs bad markets if you want another piece of evidence.
It all doesn't fit nicely in your conspiracy theory, but it makes a lot more sense. |
