The reason why the concept is difficult to grasp is because it is often assumed traders are selling something they do not have (in the hope of buying it later at a cheaper price point). In the 'real' world, you cannot sell someting you don't own.
Apparently traders can cover the sell with a buy option... but where do they get these buy options, and why would a stock holder (pension fund, whatever) commit to a sale without an agreed price, knowing there is the potential for the buyer to contribute to a run on the stock price.
I suspect the answer is that they sell blind in the hope they drive the sale price down and then are able to buy the stock at the cheaper price. If too many people participate in this selling, then there can be a shortage of available stock to purchase when the books need to be balanced and that caused a big bounce up again.
Isn't it the blind shorting that is being curbed?
They always say that that traders dont care a damn which way the markets are moving (its not their money) just so long as they know the direction so they can make their commissions on every trade.
26 Aug 2011 16:07 Read comment
The issue is that to the public selling short just aint natural. Isn't selling sometimes blind too - selling blind to make a profit with no up front guarantee of having the stock reserved to purchase. That's just gambling. Isn't that what drove VW shares up when traders had shorted them and then couldn't convert because there were no shares to buy!
Something else is wrong in that equation, because if shares were offered 'at market price' then short selling would fail:
Agree to purchase stock at $100 (market price)
Sell, sell, sell at 100, 95, 90... (say average 95)
Buy, buy, buy at 90 (making $5 per share)
But you lost $5 on the original agreement to buy, so its even so far - you have to gamble on the market continuing to drop (stimulated by other share dumping) and buy at $85 - making $5 (=5%) gain.
I suspect the markets only drop when stock is sold beyond what is available to buy, and that sounds like fiddling the books.
22 Aug 2011 17:03 Read comment
These schemes use the secure SIM storage for one good reason - its the only component that the Operators have control of that the Banks do not. There are other good reasons too, such as removing the need to be within radio coverage, which is important if you are in the basement of a retail shop trying to pay-by-phone.
But the side effect is to create a prepaid-wallet that you need to store credit on. And your point is the OTA topup? I actually don't see it as an issue at all. No more than ANY online commercial txn.
But I don't like the idea of creating another payment bucket... the mobile subscriber already has a perfectly good source of funds - their prepay account or their post-pay account. Both can be used to pay for stuff. Why create a second pot of funds. Simply provision the wallet with pseudo credit in the form of dynamic payment rules. The rules link to the pre or post pay account and vary according to the previous status, bill type, spend history, or operator/user settings (e.g. max spend per txn). That way you are combining the benefits of the local SIM based wallet with the existing billing relationship.
I doubt the ISIS and UK schemes are planning this, but to be truthful I have not checked yet.
22 Aug 2011 15:43 Read comment
Brett,
Another great Blog - I like this one because I bet most readers have had to do the exact same things - play the 'system', duplicate passwords, one-way trust conversations, deciding how much data to share online etc.
There was a 'perfectly good' concept of digital identity based on Public Key Infrastructure, but the implementations of it proved fragile. Biometric meets with much scepticism although many of us use retina scans, fingerprints, hands, veins, even voice routinely to identify ourselves.
Banks seem to prefer the gadget ridden OTP approach, forcing customers to fiddle with tech to set up new payees or do anything important. Payments Providers 3D secure VbV and SecureCode checks are painful and seem insecure to me, designed only to offload liability to the customer, while adding another attack point for fraudsters in the process.
Someone, probably online, will create an acceptable digital passport which becomes acceptable across disparate services. Not sure it will be FB, but Google might yet succeed. Banks are too insular.
22 Aug 2011 11:27 Read comment
Very true. As with many countries nearer home (Spain, Italy...), a local Chinese Partner is an unavoidable and essential business overhead to do effective business there.
Many companies (mine included) have chased the promise of 'cracking' China, only to be thwarted by a change of heart and a local relationship which pulled the rug and left little recourse. A case of 'caveat venditor'
16 Aug 2011 11:57 Read comment
You have to be logged in to select 'notifications' because otherwise how would Finextra know where to send the emails! They need to know who is asking.
15 Aug 2011 19:20 Read comment
OK,
And now I can confirm that even with an Anonymous comment, you still get an email when anyone else comments. So there really is no excuse for not adding a simply comment to a blog if you really want to track it.... its at least a courtesy to the author of the blog that someone is interested in it.
15 Aug 2011 11:33 Read comment
Since Finextra added the ability to comment anonymously, it didn't seem like too much trouble for someone to add a simple note to a Blog to say something like 'interesting, well done' or 'sorry but I disagree - anyone else?'
90% of Blogs go uncommented, and we should encourage comments, anonymously or not.
I'll go anon on this one and see if I still get the email alerts.
12 Aug 2011 15:38 Read comment
Superb! This is exactly my point that NFC trials have nothing to do with Mobile Operators processing payments, but the existing payment processors who control the (current) POS terminals (as they get cycled to include NFC readers). The operators is just selling a few handsets. In time, Payment Apps will allow payments via NFC channel to divert funds from SIM resident credit or directly from the mobile account. Such an App, if trusted, could create a nice payments statement for you and aggregate payments from different sources into a single view - useful.
01 Aug 2011 15:43 Read comment
Paul, I'd say in your Amazon example, Amazon are recommending exactly the kinds of products that 'the account' overall will be interested in. If it only recommended stuff for you, it wouldn't get up- and cross-sells from your wife for example, so it is probably working for Amazon which is why as a retailer they do it. You can always have your own account!
As for Banks using my transaction data - that's been suggested as a rich service they could offer to retailers to enable then to offer relevant products and services. Of course, the customer has to opt-in to this, but Banks normally find a way to 'enforce' this cooperation. Te problem as always is that no one bank has the full picture. Purchases are spread across different banks and even mobile accounts.
The way to have a full view of personal purchases, perhaps, is when more people reach for their mobile to make purchases of any kind, in the way you used to reach for your wallet. Your phone(or Payments App) could effectively aggregate all types of purchase, from NFC, to online to bill payment. To do this, someone needs to offer a true multi-pocket wallet App which hooks into all payment types (no mean feat, even for the top 3). That wallet app can then record your transactions and if you allow it, post it securely online where retailers can tap into a genericised version of it. The consumer could even earn credits for every time the data is accessed.
Basically, if you want relevant offers, or promotions and deals, you have to be prepared to give a little.
01 Aug 2011 11:29 Read comment
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