A movie studio-created algo-rhythm meant to choose the ideal actor to play James Bond in future films. Put into place after the Roger Moore era, when studio executives re-watched Moonraker and said to themselves "what have we done?"
If only...In reality, its a system used by the New York Stock Exchange to facilitate bond trading. The ABS is an electric program that stores trade requests for bonds and holds them until a deal partner is found, or the original person cancels the request.
So if you want to buy or sell a bond, you put a bid or ask into the system. It then sits until someone comes along who either wants to buy what your selling or is willing to sell what you want to buy. If no one comes along, you can choose to cancel the order.
The trading volume for bonds is lower than stocks, so the market is less liquid. That means it sometimes takes longer to find someone on the other side of the transaction. The ABS helps smooth out the process and keep the market moving.
Related or Semi-related Video
Finance: What is the Arms Short Term Tra...13 Views
finance a la shmoop what is the Arms Short Term Trading Index not to be
confused with the short arms term trading index a run by this guy all [Man with dinosaur for a head sitting at a desk]
right Richard Arms invented it in the 70s and then a journalist cleverly
renamed it Trin.... short for trading index very clever
yeah well Trin as in Rin Tin is just an index for the advanced decline ratio in
the stock market and if you haven't seen our video on it oh well you should we've
had George Clooney of fortune so directed the computation of the Trin [George Clooney directing a show]
looks like this Trin equals advanced issues divided by declining issues all
over advanced volume divided by declining volume....
So note that this equation maps volume as an element of the computation so it's
meaningfully more useful than just the vanilla advanced decline ratio and hey [Man discussing equation]
just keeping it real their advanced decline ratio we love you but you're [Advanced decline ratio laying on sofa eating doughnuts]
just not as good all right well so if we compute things we get a value of 1 and
well that's good or rather a bullish sign that the market "wants to go
up" above one is bearish and at premiums of 30 40 50 percent ie [Bear walking by a river]
calculations of 0.5 very bullish to 1.5 very bearish well those are signs that
have been validated by actual market performance over time well why would we
care about this calculation in the first place, well if we get the answer right as [Man staring at a crystal ball]
to where the markets going well you know we can make a fortune
yeah ask Warren Buffett... [Warren eating dinner]
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