Would you trade on a platform where the underlying commodity is less than 1% of what was being traded?
Well, that is what you are doing if you are playing in the Comex Gold and Silver markets. Basically, if the music ever stops, 1 in 100 people will get their gold or silver. So, not only are you playing in a rigged market, you are betting on whether the market will exist at the end of the futures contract.
Just as long as those cracks in the dyke don't spread into fissures, we will all be all right...
Would you trade on a platform where the underlying commodity... doesn't exist?
Well, that is what you are doing when you are buying anything on the NYSE.
No, really.
Lots of the big companies are buying back their stock, reducing the amount on the market.
Still, many stocks are trading record volumes. How is are both of these possible?
Enter DTCC failure to deliver. You bought a stock. You paid for the stock. And... well, something went wrong so here is your money back. This is not an uncommon occurrence. And, if its not just the stock exchange, your brokerage house may not have actually purchased the stock either.
Further, even if you bought the stock, you don't own it. Your broker does. But they don't own it either, the Depository Trust and Clearing Corporation does.
So, in actuality, ever day, millions of stock that don't exist are traded back and forth by computers and a few people. I guess this is all fine, as long as you don't believe you are actually buying any stock.
The shenanigans pulled by brokerage houses were annoying, but today things are far worse.
Most traders put in stop losses. And big market movers know this. (and some speculate that your brokerage firm sells them the information about where your stop is.) So, a market mover who wants to buy a large block of stock, will start selling, pushing down the price triggering all those stops. And thus, pick up the stock at a discount of what you or I would pay for.
Everyone knows this happens, but nothing is done to even curb these shenanigans.
And then, comes high speed trading. Which actually works thusly. You, the small trader puts an order in to buy something. The high speed traders front run your order, buys it, and then sell it to you at a higher price. The high speed traders have made all stocks cost more, without adding any benefit to the system.
High speed trading should be outlawed by the stock exchange, just for the fact that the stock exchange cannot keep track of all the buying and selling and make sure each transaction was done correctly. (See failure to deliver) And since the stock exchange can't handle this, the most essential part of why the thing exists in the first place, then it should be forbidden by the exchange. But, they don't. You can probably guess why.
So, what would happen if everyone actually started demanding their stock?
What if people demand honesty and transparency in their ownership of companies?
Thus enters block-chain. The perfect platform for actually exchanging stock-tokens.
Where there is no front-running. There is no failures to deliver. Everyone know where every stock is at every block.
Its perfect... unless you want to continue running a scam operation.
I am sure it is only a matter of time before all stocks are tokenized on a block-chain.
Veritaseum is already working on stock exchanges.
And, if a corporation wanted to go further, they could adopt a platform like steem, and have communication with all of its owners, while keep track of who each owner is, and what their holdings are. They may even be able to do dividends through such a platform.
To top it off, a block chain tokenized shares is cheaper for the corporation. Cheaper and faster for the traders. And more secure and trustworthy for the investors. The cost savings alone, will destroy the stock exchange.