Why is the normal distribution not normal? - page 35
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Hm. It's interesting how you compare price fairness and market efficiency. I hadn't even thought of such a connection. Perhaps you're right, the closer the price is to a fair price, the more the market will resemble an efficient market model. And to put it simply - martingale.
Would you mind explaining what a fair price is?
In my own words without wikipedia etc.
Would you mind explaining what a fair price is?
>> in my own words, no wikipedia.
I just explained it in my own words. :)
Read my first post on page 31. 31. I illustrated it with a simple example.
And I was just explaining it in my own words. :)
Read my first post on page 31. 31. I illustrated it with a simple example.
I have seen the example.
Saw the question in your post.
I didn't see a definition.
But that doesn't stop you from using the term and saying the price may not be fair.
I would like to clarify what a fair price is
I have seen an example.
Saw the question in your post
I didn't see a definition.
But that doesn't stop you from using the term and saying that the price may not be fair
I want to clarify what a fair price is.
How would you define it? It seems to me that you just want to challenge the validity of the term.
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I first came across this term in mql programs. It actually meant the estimation of a situation by the trading system.
No pretensions to objectivity. :) Is there an "objectively fair" price? It cannot be proved at all that it exists or not. But you can use the term to make a point.
--
And you can smartly argue "usage rights". :) What do you choose ? ;)
How would you define it yourself? It seems to me that you just want to challenge the validity of the term.
--
I first encountered this term in mql programs. It actually meant the estimation of a situation by a trading system.
No pretensions to objectivity. :) Is there an "objectively fair" price? It cannot be proved at all that it exists or not. But you can use the term to make a point.
--
And you can smartly argue about "usage rights". :) What do you choose ? ;)
I don't want to argue "with a clever look".
I really want to argue the validity of the term
I don't really care who wrote what in the mql manuals about it.
I really think that any price at which a deal was made is fair and we shouldn't add this adjective
There is no and cannot be a fair price.
If you spend a day in the desert and buy a bottle of water for 100 quid, that is its price and it cannot be unfair.
If someone wants to sell a rusty kopeck for 10,000 quid, that's not a price, but a bid.
If someone wants to buy a new foreign car for 100 quid, it is not a price but a bid.
the transaction price of a commodity is born at the moment of the transaction and cannot be fair or unfair
I would like to clarify what a fair price is
In my opinion, for our brother trader we can replace the term "fair price" of an asset with "price expectation". That's all. :)
But it will not do without semantic losses. For me personally the term "fair price" is more "telling"... If we are talking about an ordinary commodity, its fair price is of course directly related to the cost of its production. In the case of stocks, currencies, etc., we can't talk about the cost of production. But we can talk about other characteristics of a security that determine its "value" - its yield, the economic condition of the issuer, etc.
Sorry, I'm not ready to talk about such characteristics in more detail at the moment. Besides, the problem is that there are different methods of estimating "fair price". Each trader has his own. Which, however, does not prevent us from being confident that there is an objective "fair price" for a security :)
Mischek писал(а) >>
If you spend a day in the desert and buy a bottle of water for 100 quid, that is its price and it cannot be unjust, don't want to buy it.
If someone wants to sell a rusty kopeck for 10,000 quid, this is not the price but a bid.
If someone wants to buy a new foreign car for 100 dollars it is not a price but a bid
Exchange bids are prices in Offer and Bid - supply and demand. That is, the exchange prices are the best bids in terms of price. There is no guarantee that deals will be made at these prices.
transaction price of a commodity is born at the moment of the transaction and it cannot be fair or unfairAnd it is an agreement on a price that both parties have come to and considered a fair price. But it is not a price, it is an agreement on price. Because the parties can also execute a non-market transaction at non-market prices, for example on the basis of a long-term forward contract or an option of some kind.
In short, the price is what's on the price tag, i.e., supply and demand. It is up to the parties involved to decide whether it is fair or not. So the notion of "fair price" is purely subjective. However, for those with insider information, a fair price is the most objective, or at least this information allows a much more accurate determination of its value.
In my opinion, for our brother trader we can replace the term "fair price" of an asset with "price expectation". That's all. :)
You can't. Expectation is a mathematical term and does not need to be reformed (abstracted). For example, a simple moving average is, by mathematical definition, an expectation over a given period. Since the probabilities are not known, the arithmetic mean or in mathematical terminology - expected payoff is allowed.
I reread it, but I still don't get it. Why do you need all this? What do you want to achieve with this generation? There are quite convincing assurances, that the best model of exchange prices today are GARCH-models. Why all the Cauchy, Levy, normal...
P.S. Imho, it is useless to estimate the distribution of the entire available history of series. You have to look for local dependencies...
I didn't even get into such threads before. For similar reasons. But then I got carried away. Just out of "love of art" kind of thing. A thought occurred to me, I wrote it once, and then one thing led to another. Although there is an applied moment: I want to better understand the pricing process, even feel it somehow. As for cashing in the derived formulas/models, that's another problem. Most likely the money will not come out of the model directly.) But understanding can help in cashing out.
P.S. Exactly.
:)
I don't want to argue "with a clever look".
I really want to argue the validity of the term.
I don't really care who wrote what in the mql manuals about it.
I really think that any price at which a deal was made is fair and we shouldn't add this adjective
There is no and cannot be a fair price.
If you spend a day in the desert and buy a bottle of water for 100 quid, that is its price and it cannot be unfair.
If someone wants to sell a rusty kopeck for 10,000 quid, that's not a price, but a bid.
If someone wants to buy a new foreign car for 100 quid, it is not a price but a bid.
the price of a transaction in goods is born at the moment of the transaction and it can't be fair or unfair
Here. Quite valuable observations. Now you too understand that the "fairness" of the price is directly related to the efficiency of the market. :)