I think I am still not clear on the difference between the two.
Do both of these trading tactics NOT care about the price and commission?
Thanks!
Anyone?
I’d like to revert but could you be more specific what you are referring to? which topic chapter etc?
sorry, just saw the chapter now but perhaps you could give an example?
Do both of these trading tactics NOT care about the price and commission?
-Yes.
From my perception liquidity-at-any cost is more concerned with liquidating a large position (ex: through a block sale). The price at which the sale will be done still matters to the PM, but the more important matter is that the whole block should be executed - the transaction will be big, which is why costs don’t matter.
Costs-are-not important also wants to execute the order quickly (ex: via market order), but my perception here is that the size of the transaction will not be as large as the liquidity-at-any cost. Since quick execution is a priority, and the trader believes that the price at which they transact is the best execution, costs such as market impact and commissions are secondary to speed of execution.
In summary:
Liquidity-at-any cost: priority is that the whole size of a large block can be executed at once
Costs-are-not important: priority is that the order can be executed quickly at the market
Great summary! Thank you for the help!
Bringing this up cause this post helped me.
Example question:
2016 Mock AM, Q60
Mark it !