LogFAQs > #950070475

Forceful_Dragon posted...

But is it the volume that is the problem?

Or just the time it takes for the funds and stocks to properly change hands?

How is it something that's still an issue? From my perspective I pick a stock, I spend money to buy the stock, now I have the stock to do with what I please including selling the stock again. I could turn around in half an hour and sell the stock I just bought and the trade would go through and then someone else will have the stock. So what part of my original trade is unresolved? I received the stock, someone else received the money for the stock. The person who got the money could in some cases immediately withdraw and use the money. So how is it that there is a middleman with a seemingly infinite amount of debt(?) while both the buyer and the seller have moved on with their lives.

So in a hypothetical system without these middlemen, you couldn't just freely sell stock. You'd have to advertise that you have X stock of Y and you're willing to sell it for Z. Then anyone else could come and take you up on that offer. There's no guarantee they would, though; maybe your price is too high, maybe there's just no one around who happens to want to own the stock even if it's in theory at a fair price, etc. Similarly you could see what other people had to sell, but maybe no one has the stock you want for sale right now, or they're only willing to sell in bulk, or whatever.

Going from this scenario to your smooth experience buying/selling stocks are why the middlemen are useful.

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Congrats to azuarc, GotD2 Guru champ!