Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi James & team, Often there are trades of a single share or a few shares traded in the daily transactions. Just wondering who is making those trades? Is there a rationale behind it? How do you think the market & commodities will react if Russia invades Ukraine? Thanks & regards Sidney
Hi Sidney,
Computers are making those trades for various reasons. For example, often when we transact our buys and sells we use a computer that trades automatically in line with the volume weighted average price (VWAP) for the day. It just means that our volume has less impact on the market because we’re trading very frequently in small sizes. I used to employ someone to do this manually for us, computers are much better at it and they don’t have sick days!
If Russia invades the Ukraine its like many geopolitical events i.e. a coin toss but when the allied forces invaded Iraq after falling for weeks the global equity markets enjoyed an aggressive relief rally i.e. “buy on rumour / sell on fact”.
Here’s the chart that Shane Oliver from AMP pulls out in every market sell-off as a reference point to keep calm and carry on.
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