, Columnist
Swap Prices and Awkward Meetings
Also early education, yacht taxation, and people who are worried about bitcoin liquidity.
Swap pricing.
If you buy a share of stock, the instant after you buy it, it is probably worth a bit less than what you paid. If the stock traded at $99.99 bid and $100.01 offered, and you bought at the offer and paid three cents of commission, then you paid $100.04 for a share that is "worth" -- at mid-market prices -- $100.00. In some sense you instantly lost 0.04 percent of the value of your investment. But no one really thinks of it that way, because that is a small number, and also because it goes to things -- commission, bid-ask spread -- that are reasonably transparent and that everyone recognizes as transaction expenses. Those things are related: The transaction costs are small in part because they are transparent.