/biz/ - Business & Finance

[Anonymous No.55849134]

Been seeing some schizos go on and on about arbitrage and index trading. Explain it to me like I'm six years old. BTC is bullish. It's time to prepare for my retirement somewhere on the beach.

[Anonymous No.55849179]

>>55849134
Arbitrage is taking advantage of different prices in different markets. I will give you an example that will never happen but it is an example. Honda is a Japanese car company. It trades on the Japanese stock exchange (called the Nikkei). Big banks like Bank of America, Morgan Stanley, etc. will buy big amounts of those stocks to sell on other exchanges like the New York Stock exchange (NYSE). If you see a stock with ADR in the name it is probably an example of this. I am too lazy to look up Yen spot conversion rates but let’s say it’s 120/1USD right now. If Honda Stock was trading at 12k Yen ($100USD) in Japan and $80 (9600¥) on the New York stock exchange you have 2 prices for the same thing. You’d then buy Honda on the NYSE and short it on the Nikkei until the price action became equal; that is to say the price in Japan translates to what it is in the United States, or is reasonably close as we can only go to 2 decimals with Pennies. You’ll never get an opportunity that is this extreme in real life with stocks (I literally am employed to do math at a buy side firm to prevent this) but with some suspect crypto, you can get small examples of this happen. It sorta matters when you’re buying millions of shit coins for a few bucks. If they ever experience rapid growth, you can make money hand over fist.

[Anonymous No.55849350]

>>55849134
Don't know much about index anon, but arbitrage is basically leveraging on price differences on exchanges and taking advantage of it. Most trading strategies have similar patterns if you take time to study them. Good luck on your beach retreat.

[Anonymous No.55849357]

>>55849134
>index trading
This has all the advantages you need. Create, sell. makes good returns. Makes provisions for sustenance.

[Anonymous No.55849367]

>>55849179
Nice analysis. Can you explain index trading the same way? I'm lurking here and reading all comments.

[Anonymous No.55849440]

>>55849367
I will give it a shot.

What I normally see here is people advocating for DCA into index funds. DCA means dollar cost average which is a fancy way of saying buy little bits over time. More than likely if you have a 401k or equivalent, your dollar cost averaging into some mutual fund. Just keep accumulating shares and you’ll be able to either A, sell them for more than you paid for them or B, have many more to sell than you bought due to splits and the like. That’s the DCA part, now we get into the index. An index is nothing more than a collection of stocks put together. The stocks are assigned a weight for an individual index (usually this is market cap: share price * shares outstanding). There are several indices that get lots of attention, Dow Jones Industrial Average, Russel 2000, Nasdaq, Nasdaq 100 but the most popular is the Standard and Poors (S&P) 500. It is approximately the 500 largest companies traded on American stock exchanges. The companies contribute based upon their market cap; that is to say, Apple alone is about 8% or so the S&P500 by itself. These indexes can track different things, there’s some that are international, small cap focused, tech focused (Nasdaq) and so on and so forth. The appeal is diversification. Over the long run, if you just invest like the indexes or better yet, buy an ETF that people get paid to fuck with to do the same thing so you don’t have to. I used an acronym: ETF is an exchange traded fund. You buy it just like a normal stock. They normally will track some index like the S&P500. You’ll pay a small management fee (known as expense rate) for them to do work on your behalf. The fees are normally nothing on index funds because the managers aren’t doing any thinking, just math to make their fund equal to what S&P500 is composed of.

I’m any case, it’s damn near impossible to lose money in the long run with this strategy and you can retire a millionaire with it if you just DCA over time

[Anonymous No.55849495]

>>55849440
>What I normally see here is people advocating for DCA into index funds
They clearly know what they are saying then. Question is, who has the patience for it? They all want to make it quick.

>seems Wednesdays are for educative threads. I should come more often.

[Anonymous No.55849512]

>>55849440
Stocks, ETF, ones for the rich no? I prefer crypto index. Few platforms offer that now but AstraDAO has been doing the most with good returns and self custody for creators.

[Anonymous No.55849732]

>>55849134
>Explain it to me like I'm six years old

Alright little schizo, imagine BTC is like a special shiny rock that a lot of people want. Right now, a lot of people think this shiny rock will become even more valuable in the future. So, they want to buy it now and keep it safe. This is what we call "bullish."

Now, imagine you have a cool idea. You can buy this shiny rock from one place for a lower price and then sell it to another place where people will pay more for it. This is called "arbitrage." It's like buying a candy for 50 cents and selling it to your friend for 75 cents.

Another thing people do is put their shiny rocks together in groups. They call these groups "indexes." It's like collecting different types of toys and putting them all in one box. This way, if one toy isn't doing so well, the others can help it. This is called "index trading."

So, if you think BTC will keep being valuable, you can do arbitrage and index trading to make your shiny rocks even more valuable. Then, when you grow up and want to retire on a beach, you'll have lots of shiny rocks to use.

That's the best I can provide.

[Anonymous No.55849751]

>>55849134
>index trading.
The last time I have checked, index trading was underrated. But it's an opportunity to get used to the investment strategy.

[Anonymous No.55849763]

>>55849179
I'm intrigued with this real life explanation, oldfag. What about the index trading that the OP also talks about? Nobody seems to give a damn about it, though.

[Anonymous No.55849781]

>>55849350
Index trading is when you invest in a group of different things, like stocks or cryptocurrencies, to spread risk and potentially make money if the whole group goes up in value.

[Anonymous No.55849812]

>>55849357
How do i create it? Will appreciate. jeet.

[Anonymous No.55849817]

>>55849732
>They call these groups "indexes." It's like collecting different types of toys and putting them all in one box
So basically diversification. Thanks for you time anon.

[Anonymous No.55849827]

>>55849763
The explanantion is up there jeet. Try and be reading. This is how y'all get rekt and blame incel influncers on the internet.

[Anonymous No.55849837]

>>55849812
Choose winning indices based on market performances. Could be ETH, BTC or other tokens. Sell at your pace. Rince and repeat.

[Anonymous No.55849901]

>>55849440
Well fucking nailed. And to think what works for stocks and ETFs also works for crypto.

[Anonymous No.55849928]

>>55849495
>Question is, who has the patience for it? They all want to make it quick.
Index investment is the gateway to building wealth for me.

[Anonymous No.55849939]

>>55849512
>Few platforms offer that now but AstraDAO has been doing the most with good returns and self custody for creators.
Heard crypto index is now the real deal, hell yeah.

[Anonymous No.55850318]

>>55849134
Hey, kiddo. You know how you swap game cards? Imagine folks doing that with cash. They find cheap stuff, and sell it higher elsewhere. That's arbitrage – easy money

[Anonymous No.55850326]

>>55849134
>BTC is bullish.
Nothing is bullish you moron. Save your stables and explore other passive ways of earning.

[Anonymous No.55850335]

>>55849134
>retirement
be aware that you will be here for at least 4 years
we still need the market to recover
even if I can pay the rent with CHIKUN there is still a long way to go before anyone here will be able to enjoy all the savings

[Anonymous No.55850357]

>>55849134
>BTC is bullish. It's time to prepare for my retirement somewhere on the beach.
You got this man. Index trading's like having a bunch of game skins – when they're hot, you're hot. BTC's the legendary skin RN, so get ready to cash in those V-Bucks for a retirement emote on the beach

[Anonymous No.55850400]

>>55849350
Index trading is highly based and pays better than those sick arbitrage. While those plebs are busy chasing individual stocks, we index bros are riding the waves of the market as a whole. You just have to be smart.

[Anonymous No.55850410]

>>55849367
Why can't you do your own research rather than wait on who will spoonfeed you like a retard.

[Anonymous No.55850424]

>>55849512
You're spittin' some truth there. Stocks and ETFs might've been the old guard for the elite, but we're all about that crypto index game now.

[Anonymous No.55850435]

>>55849827
>Try and be reading
Jeets and retards read but they can't understand

[Anonymous No.55850858]

>>55849928
It is not just a gateway, it's like leveling up – decentralized and open to everyone, not just the Wall Street fat cats that keeps rigging the market.

[Anonymous No.55850919]

>>55849781
Index trading is the real deal because you diversify that portfolio with a bunch of different goodies, so if one of 'em tanks, you're not totally screwed.

[Anonymous No.55850957]

>>55850919
Is there a real crypto equivalent of a stock index? I’d have to imagine BTC is the driving force in it

[Anonymous No.55850978]

>>55849827
>try and be reading
Oh hello ranjesh. How's pradesh?

[Anonymous No.55850983]

>>55849512
>AstraDAO
Those dudes are straight up pioneering the crypto index scene.

[Anonymous No.55851011]

>>55849495
Well there’s always options if you want to make a quick buck… realistically they’re a donation to the hedge fund manager’s wine collection for most people. Of course, you can strike it big, but it’s hard because nearly everything is priced in but there are examples of that not being the case. Very recently, someone bet against the Hawaiian Electric company and a few days later they drop 40% and that person made thousands in blood money hand over fist.

[Anonymous No.55851611]

>>55849134
Remember how you use to have lots of friends in the hood, and you had to go to the next friends house because the parents are back and play's over, yea, looks more like index trading

[Anonymous No.55851637]

>>55849781
And AstraDAO is one of the best platform that offers top crypto index trading

[Anonymous No.55851673]

>>55849901
It could, crypto index trading is quite recent but there is a big chance anons can very much make the most of index trading in the crypto space

[Anonymous No.55851716]

>>55850400
Sure thing, instead of having all to do with a single crypto basing on how it fairs in the market or not, best investors diversify their funds and make the most of different crypto investments

[Anonymous No.55851732]

>>55851611
Not a bad description. Index trading is the new financial haven for investors and also in the crypto space especially engaging DAO-managed treasury platforms

[Anonymous No.55851761]

>>55851732
Talking about DAOs, BitDAO and AstraDAO have some amazing features that diversifies investment strategies with some profit oriented opportunities

[Anonymous No.55851795]

>>55851637
The user staking model on the platform is pretty impressive, users can lock up their tokens and earn passively while they go about their daily business

[Anonymous No.55851825]

>>55850957
Yea, you should probably DYOR AstraDAO for a start