sonny-dev/inters-qdu huggingface dataset:
Query: Do brokers execute every trade on the exchange?

Relevant passages:
 <=SEP=> There are two terms that are related, but separate here: Broker and Market Maker.  The former is who goes and finds a buyer/seller to buy/sell shares from/to you.   The latter (Market Maker) is a company which will agree to partner with you to complete the sale at a set price (typically the market price, often by definition as the market maker often is the one who determines the market price in a relatively low volumne listing).  A market maker will have as you say a 'pool' of relatively common stock (and even relatively uncommon, up to a point) for this purpose. A broker can be a market maker (or work for one), also, in which case he would sell you directly the shares from the market maker reservoir.  This may be a bad idea for you - the broker (while obligated to act in your interest, in theory) may push you towards stocks that the brokerage acts as a market maker for.
Query: Does Implied Volatilty factor in all known future events?

Relevant passages:
 <=SEP=> In short, yes. Implied volatility will capture any expected upcoming material announcements. There is also supply/demand impact bundled in which may inflate an option price, and by extension increase implied volatility. OTM and ITM options are particularly predisposed to this phenomenon -- which is of course at odds with the traditional BS model assumptions -- the result is referred to as the volatility smile. Implied volatility is quoted as an annualised measure but isn't necessarily an annual value -- it will correspond to the option time period.

 <=SEP=> From every article I've encountered, the chicken and egg aspect suggests that IV is produced by looking at options pricing, and calculating the IV from that.  The implication is that whatever is known at that time is included in the price. And that when you see a particular option trade an unusual number of contracts at a given price, the implication is that someone thinks they know something that's not already priced in, i.e. that the current price is not accurate, they can profit on the future event.
Query: How is the Dow divisor calculated?

Relevant passages:
 <=SEP=> Have you actually read the Wikipedia article? To calculate the DJIA, the sum of the prices of all 30 stocks is divided by a divisor, the Dow Divisor. The divisor is adjusted in case of stock splits, spinoffs or similar structural changes, to ensure that such events do not in themselves alter the numerical value of the DJIA. Early on, the initial divisor was composed of the original number of component companies; which made the DJIA at first, a simple arithmetic average. The present divisor, after many adjustments, is less than one (meaning the index is larger than the sum of the prices of the components). That is: DJIA = sum(p) / d where p are the prices of the component stocks and d is the Dow Divisor. Events such as stock splits or changes in the list of the companies composing the index alter the sum of the component prices. In these cases, in order to avoid discontinuity in the index, the Dow Divisor is updated so that the quotations right before and after the event coincide: DJIA = sum(p_old) / d_old = sum(p_new) / d_new The Dow Divisor was 0.14602128057775 on December 24, 2015.[40] Presently, every $1 change in price in a particular stock within the average, equates to a 6.848 (or 1 ÷ 0.14602128057775) point movement. Knowing the old prices, new prices (e.g. following a split), and old divisor, you can easily compute the new divisor... Edit: Also, the detailed methodology is published by SP Indices (PDF). Edit #2: For simplicity's sake, assume the DJIA is an index that contains 4 stocks, with a price of $100.00 each. One of the stocks splits 2:1, meaning the new price/share is $50.00. Plugging the numbers into the above equation, we can determine the new Dow Divisor: 400 / 4 = 350 / d => d = 3.5

 <=SEP=> The details of the DJIA methodology is outlined in the official methodology document on their website.  In addition, you will need their index mathematics document, which gives the nitty-gritty details of any type of adjustments that must be made. Between the two you should have the complete picture in as fine a detail as you want, including exactly what is done in response to various corporate actions like splits and structural changes.
Query: What do these numbers mean? (futures)

Relevant passages:
 <=SEP=> "No, it means that is only the notional value of that underlying asset of that contract, generally. The contract specification itself is listed on the exchange's websites, and there are really no assumptions you can make about a particular contract. Where S&P futures have one set of specifications, such as what it actually represents, how many each contract holds, how to price profits and losses... a different contract, such as FTSE 100 stock futures have a completely different set of specifications. Anyway in this one example the s&p 500 futures contract has an ""initial margin"" of $19,250, meaning that is how much it would cost you to establish that contract. Futures generally require delivery of 1,000 units of the underlying asset. So you would take the underlying asset's price and multiple it by 1,000. (what price you use is also mentioned in the contract specification), The S&P 500 index  is $1588 you mentioned, so on Jun2013 you would have to delivery $1588 x 1000, or $1,588,000. GREAT NEWS, you only have to put up 1.2% in principal to control a 1.5 million dollar asset! Although, if even that amount is too great, you can look at the E-Mini S&P futures, which require about 1/10th the capital and delivery. This answer required that a lot of different subjects be mentioned, so feel free to ask a new question about the more specific topics."

 <=SEP=> The other answer covers the mechanics of how to buy/sell a future contract. You seem however to be under the impression that you can buy the contract at 1,581.90 today and sell at 1,588.85 on expiry date if the index does not move. This is true but there are two important caveats: In other words, it is not the case that your chance of making money by buying that contract is more than 50%...

 <=SEP=> The two answers given previously provide excellent information. In relation to your statement: If I buy the above future contract, does that mean I pay $1581.90 on June 13th You cannot buy the futures contract at that price. The 'price' you are seeing quoted is not a dollar value, but rather a value in points. Each contract has a point value, and this varies from one contract to another according to the specifications set out by the exchange. The point value is in dollars, and it therefore acts as a multiplier for the 'price' that you've seen quoted. Let's look at an example for the E-Mini S&P futures. These trade electronically on the Globex exchange, the ECN order book of the CME, and carry the ticker symbol ES.  The ES contract has a point value of $50. If the quoted price for the ES is 1581.75, then its dollar value is 50 x 1581.75 = $79,087.50 So in order to buy this contract outright, with absolutely no use of leverage, then one theoretically requires $79,087 in one's account. In practice though, futures are traded on margin and so only a deposit amount is required at the time of purchase, as CQM has explained.
Query: What type of returns Vanguard is quoting?

Relevant passages:
 <=SEP=> "From the Vanguard page -  This seemed the easiest one as S&P data is simple to find. I use MoneyChimp to get -  which confirms that Vanguard's page is offering CAGR, not arithmetic Average. Note: Vanguard states ""For U.S. stock market returns, we use the Standard & Poor's 90 from 1926 through March 3, 1957,"" while the Chimp uses data from Nobel Prize winner, Robert Shiller's site."
Query: IS it the wrong time to get into the equity market immediately after large gains?

Relevant passages:
 <=SEP=> Its best to dollar cost average adding say 5%-10% a quarter into the fund. That's what Clark Howard would suggest.  Also make sure you do not need the money for 5 years, then you should be okay.   Its tough to lose money if you keep your money there for a long period of time.

 <=SEP=> If your gut told you to buy during the depths of '09, your gut might be well-calibrated. The problem is stock market declines during recessions are frequently not that large relative to the average long run return of 9%:  A better strategy might be hold a percentage in equities based upon a probability distribution of historical returns.  This becomes problematic because of changes in the definition of earnings and the recent inflation stability which has encouraged high valuations:  Cash flow has not been as corrupted as earnings now, and might be a better indicator:  This obviously isn't perfect either, but returns can be improved. Since there is no formulaic way yet conventionally available, the optimal primary strategy is still buy & hold which has made the most successful investor frequently one of the richest people on the planet for decades, but this could still be used as an auxiliary for cash management reserves during recessions once retired.

 <=SEP=> "Past results are not a predictor of future results. There is no explicit upper bound on a market, and even if individual companies' values were remaining unchanged one would expect the market to drift upward in the long term. Plus, there's been some  shift from managing companies for dividends to managing stocks for growth, which will tend to increase the upward push. Trying to time the market -- to guess when it's going to move in any particular direction -- is usually closer to gambling than investing. The simplest answer remains a combination of buy-and-hold and dollar-cost averaging. Buy at a constant number of dollars per month (or whatever frequency you prefer), and you will automatically buy more when the stock/fund is lower, less when it is higher. That takes advantage of downturns as buying opportunities without missing out on possible gains at the other end. Personally, I add a bit of contrarian buying to that -- I increased my buying another notch or two while the market was depressed, since I had money I wouldn't need any time soon (buy and hold) and I was reasonably confident that enough of the market would come back strongly enough that I wasn't at significant risk of losing the investment. That's one of the things which causes me to be categorized as an ""aggressive investor"" even though I'm operating with a very vanilla mix of mutual funds and not attempting to micromanage my money. My goal is to have the money work for me, not vice versa."
Query: If an index goes up because an underlying company issues more shares, what happens to the ETF

Relevant passages:
 <=SEP=> If a stock that makes up a big part of the Dow Jones Industrial   Average decided to issue a huge number of additional shares, that will   make the index go up. At least this is what should happen, since an   index is basically a sum of the market cap of the contributing   companies. No, indices can have various weightings. The DJIA is a price-weighted index not market-cap weighted. An alternative weighting besides market-cap and price is equal weighting. From Dow Jones: Dow Jones Industrial Average™. Introduced in May 1896, the index, also   referred to as The Dow®, is a price-weighted measure of 30 U.S.   blue-chip companies. Thus, I can wonder what in the new shares makes the index go up? If a stock is split, the Dow divisor is adjusted as one could easily see how the current Dow value isn't equal to the sum or the share prices of the members of the index. In other cases, there may be a dilution of earnings but that doesn't necessarily affect the stock price directly as there may be options exercised or secondary offerings made. SO if the index, goes up, will the ETF DIA also go up automatically   although no additional buying has happened in the ETF itself? If the index rises and the ETF doesn't proportionally, then there is an arbitrage opportunity for someone to buy the DIA shares that can be redeemed for the underlying stocks that are worth more in this case. Look at the Creation and Redemption Unit process that exists for ETFs.
Query: What is market order's relation to bid ask spread?

Relevant passages:
 <=SEP=> Because in the case for 100/101, if you wanted to placed a limit buy order at top of the bid list you would place it at 101 and get filled straight away. If placing a limit buy order at the top of 91 (for 90/98) you would not get filled but just be placed at the top of the list. You might get filled at a lower price if an ask comes in matching your bid, however you might never get filled. In regards to market orders, with the 100/101 being more liquid, if your market order is larger than the orders at 101, then the remainder of your order should still get filled at only a slightly higher price. In regards to market orders with the 90/98, being less liquid, it is likely that only part of your order gets filled, and any remained either doesn't get filled or gets filled at a much higher price.
Query: Why sometimes payable date is BEFORE the ex-dividend date?

Relevant passages:
 <=SEP=> Do you realise that the examples you have given are for stock splits not for dividends, that is why the date payable is before the ex-date for the split. The payments for the split occur on 30th June and the first day the stock trades with the new split is on the next trading day, being the ex-date, 1st July.
Query: understanding the process/payment of short sale dividends

Relevant passages:
 <=SEP=> "I would suggest the following rationale : This appears to be a most unsatisfactory state of affairs, however, you can bet that this is how things are handled. As to who receives the dividend you have payed, this will be whoever the counter-party (or counter-parties) are that were assigned the exercise. EDIT Looking at the Dec16 SPY options, we see that the expiry date is 23 Dec.  Therefore, your options have been exercised prior to expiry.  The 3AM time stamp is probably due to the ""overnight batch processing"" of your brokers computer system.  The party exercising the options will have chosen to exercise on the day prior to ex-dividend in order to receive the dividends."
Query: Where are Bogleheadian World ETFs or Index funds?

Relevant passages:
 <=SEP=> Half VTI (Vanguard Total Stock Market ETF) and half VEU (Vanguard FTSE All-World ex-US ETF), and stop futzing.  The US is roughly half the world market cap so this is like a total world equity index.  Very low costs. VTI Expense ratio is 0.04% as of 04/27/2017. I don't know what you mean by RSG, but it could be either a waste processor or a gold miner. Either way it seems kind of speculative to hold even 10% of your wealth.

 <=SEP=> You weren't really clear about where you are in the world, what currency you are using and what you want your eventual asset allocation to be. If you're in the US, I'd recommend splitting your international investment between a Global ex-US fund like VEU (as Chris suggested in his comment) and an emerging markets ETF like VWO.  If you're not in the US, you need to think about how much you would like to invest in US equities and what approach you would like to take to do so. Also, with international funds, particularly emerging markets, low expense ratios aren't necessarily the best value. Active management may help you to avoid some of the risks associated with investing in foreign companies, particularly in emerging markets. If you still want low expenses at all cost, understand the underlying index that the ETF is pegged to.

 <=SEP=> A proper world porfolio is a non-trivial task. No one answer exists which is the best one and how one should construct it. World? The problem with world portfolio is that it is not well-defined. Providers use it as they wish and people use it as they wish, read the history for further ado (messy stuff). You can build yourself world portfolio but warning it is getting harder. You can use this tool by selecting global equity to search through global funds -- it is very useful and allows you to find the low-cost funds with PE/PB/Div.yield. Also, investigate topic more with this tool, less spam.
Query: Does the expense ratio of a fund-of-funds include the expense ratios of its holdings?

Relevant passages:
 <=SEP=> From The Prospectus for VTIVX;  as compared to the Total Stock Market Fund;  You can see how the Target date fund is a 'pass through' type of expense. It's not an adder. That's how I read this.

 <=SEP=> "I just looked at a fund for my client, the fund is T Rowe Price Retirement 2015 (TRRGX).  As stated in the prospectus, it has an annual expense ratio of 0.63%.  In the fine print below the funds expenses, it says  ""While the fund itself charges no management fee, it will indirectly bear its pro-rata share of the expenses of the underlying T. Rowe Price funds in which it invests (acquired funds). The acquired funds are expected to bear the operating expenses of the fund.""  One of it's acquired funds is TROSX which has an expense ratio of 0.86%.  So the total cost of the fund is the weighted average of the ""acquired funds"" expense ratio's plus the listed expense ratio of the fund.  You can see this at http://doc.morningstar.com/docdetail.aspx?clientid=schwab&key=84b36f1bf3830e07&cusip=74149P796 and its all listed in ""Fees and Expenses of the Fund"""
Query: Investing tax (savings)

Relevant passages:
 <=SEP=> "You'd want the money to be ""liquid"" and ready for you to use when tax time comes around. You also don't want to lose ""principal"", i.e. if you put it into stocks and have the value of what you put in be less than what you invested—which is possible—when you need the money, again, at tax time. That doesn't leave you with many good choices or an amazingly good way to profit from investing your savings that you put aside for taxes.  CDs are steady but will not give you much interest and they have a definite deposit timeframe 6 months, 1 yr, 2 yrs and you can't touch it. So, the only reasonable choice you have left is an interest bearing checking or savings account with up to 1% interest (APR)—as of this writing Ally Bank offers 1% interest in an online interest savings acct.—which will give you some extra money on your deposits. This is what I do."

 <=SEP=> If you have a mortgage, making part of it a mortgage-backed overdraft (ANZ call theirs a Flexi loan) is worth looking at. I'm in a similar situation, consulting since 2010. I pay GST and provisional tax every six months. If I've budgeted right, the balance on the mortgage-backed overdraft loan goes to zero right before I send the massive payment to the tax department in May and October.  One problem is that some banks don't like to give these accounts to sole traders. Using a mortgage broker may help get around that restriction.
Query: Can you explain why it's better to invest now rather than waiting for the market to dip?

Relevant passages:
 <=SEP=> "Your chance of even correctly recognizing the actual lowest point of a dip are essentially zero, so if you try to time the market, you'll most likely not get the ""buy cheap"" part perfectly right. And as you write yourself, while you wait for the dip, you have an ongoing opportunity cost. Cost averaging is by far the best strategy for non-professional and risk averse investors to deal with this. And yes, over the long run, it's far more important to invest at all than when you do it."

 <=SEP=> With a long enough time horizon, no matter when you buy, equities almost always outperform cash and bonds. There's an article here with some info: http://www.fool.co.uk/investing-basics/how-when-and-where-to-invest/ Holding period where shares have beaten cash  There was a similar study done which showed if you picked any day in the last 100 years, no matter if the market was at a high or low, after 1 year your probability of being in profit was only 0.5, but after 10-20 years it was almost certainly 1.0.  Equities compound dividends too, and the best place to invest is in diversified stock indices such as the S&P500, FTSE100, DOW30 or indices/funds which pay dividends. The best way to capture returns is to dollar cost average (e.g. place a lump sum, then add $x every month), to re-invest dividends, and oh, to forget about it in an IRA or SIPP (Self invested pension) or other vehicle which discourages tampering with your investment.  Yes, values rise and fall but we humans are so short sighted, if we had bought the S&P in 2007 and sold in 2009 in fear, we would have missed out on the 25% gain (excluding dividends) from 2007-2014. That's about 3% a year gain even if you bought the 2007 high -beating cash or bonds even after the financial crisis. Now imagine had you dollar cost averaged the entire period from 2007-2014 where your gain would be. Your equity curve would have the same shape as the S&P (with its drastic dip in 2009) but an accelerated growth after. There are studies if you dig that demonstrate the above. From experience I can tell you timing the market is nigh impossible and most fund managers are unable to beat the indices. Far better to DCA and re-invest dividends and not care about market gyrations! ..

 <=SEP=> "This simulation game uses actual historical S&P 500 data to test whether you can ""time the market."" You start with $10,000 invested, and it plays back 10 years of index values, in which time you can choose to sell (once), and if you do sell you can subsequently buy (once). Then you find out how you did relative to just holding what you started with.  If you play it enough times, you might eventually beat it once. I never did."
Query: Why are US target retirement funds weighted so heavily towards US stocks?

Relevant passages:
 <=SEP=> "Excellent question, though any why question can be challenging to answer because it depends on the financial products in question.  At least, I haven't seen many target date retirement funds that include a high percent of foreign stocks, so below explains the ones I've seen which are primarily US stocks. The United States (before the last twenty years) has been seen as a country of stability.  This is not true anymore, and it's difficult for my generation to understand because we grew up in the U.S.A being challenged (and tend to think that China and India have always been powers), but when we read investors, like Benjamin Graham (who had significant influence with Warren Buffett), we can see this bias - the U.S.A to them is stable, and other countries are ""risky.""  Again, with the national debt and the political game in our current time, it does not feel this way.  But that bias is often reflect in financial instruments. The US Dollar is still the reserve currency, though it's influence is declining and I would expect it to decline.  Contrary to my view (because I could be wrong here) is Mish, who argues that no one wants to have the reserve currency because having a reserve currency brings disadvantages (see here: Bogus Threats to US Reserve Currency Status: No Country Really Wants It!; I present this to show that my view could be wrong). Finally, there tends to be the ""go with what you know.""  Many of these funds are managed by U.S. citizens, so they tend to have a U.S. bias and feel more comfortable investing their money ""at home"" (in fact a famous mutual fund manager, Peter Lynch, had a similar mentality - buy the company behind the stock and what company do we tend to know best?  The ones around us.). One final note, I'm not saying this mentality is correct, just what the attitude is like.  I think you may find that younger mutual fund managers tend to include more foreign stocks, as they've seen that different world."

 <=SEP=> A target date fund is NOT a world market index. There is no requirement that it be weighted based on the weights of the various world stock markets. If anything, historically (since the invention of target date funds), a 2:1 ratio is actually pretty low. 6:1 is, or was, probably more common. Just a token amount to non-US investments.