Ideosphere Forum
From owner-fx-discuss@maxwell.lucifer.com  Sat Jul 20 11:44:38 1996
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Date: Sat, 20 Jul 1996 11:24:29 -0400
To: if-discuss@lucifer.com
From: daves@xetron.com (Dave Steele)
Subject: Re: if-discuss: too many Claims?
Reply-To: if-discuss@lucifer.com
Sender: owner-fx-discuss@lucifer.com
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 >Dave Steele suggests that having #Claims ~= #traders is a bad thing.
>
>I think the only real requirement is that the number of traders
>interested in each issue be at least 2.

I would say that the only real requirement is that the issue be traded on a
fairly regular basis. In other words, there should be at least two traders
who can agree on a price to trade the issue from time to time. In general,
that will require many more traders that are interested in the issue.

Some more data. There were 438 trades in the last week. Here's how they
broke down in terms of number of issues traded.

#trades
     #issues
0   140
1   56
2   24
3   14
4    8
>4  28

Over half did not trade, and 75% had less than two trades executed. Those
issues in the Transaction Form are getting in the way of the real action.

>
>To my mind, the interesting question is how many holders (or traders)
>of each claim are there?
>

That information is in the ticker.

I'm not too interested in that measure. If the issue is binary, the holders
are liable to be insensitive to price fluctuations (i.e. they would have
bought at a wide range of prices). I don't believe that there is an
accurate market unless trades are occurring.

>We might implement Robin's original auto-market-maker idea, for use on
>the thinly traded claims.
>

I would agree. That would be a way to increase the virtual ratio of traders
to issues.


-----
Dave Steele                 daves@xetron.com
Xetron Corp.
460 W. Crescentville Road
Cincinnati, Ohio 45246
http://www.xetron.com/



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