Who moves prices
The players, how news becomes a price, and the macro machine.
Start
- 3 lessons
- 19 min
About this section3 goals5 key words
The firms and people on the other side of every trade, how news becomes a price, and the economic machine (growth, inflation, rates) that moves every market at once.
What you will be able to do
- Name the buy side, the sell side, market makers, prime brokers, clearing houses and regulators, and the desks inside a bank.
- Explain how filings, earnings, news and surprises reach prices.
- Describe how growth, inflation and the central bank connect to stocks, bonds and currencies.
Five words to know
- buy side
- firms that invest money: funds, pensions, insurers
- sell side
- banks and brokers that sell services and research to the buy side
- filing
- a document a company must send to the regulator
- surprise
- the gap between a published number and what was expected
- central bank
- the public body that sets the short-term interest rate
- 01Who is who on Wall StreetWall Street is a few kinds of players: the buy side invests money, the sell side sells it services and trades, the plumbing (market makers, prime brokers, clearing) makes trades happen and settle, and regulators watch them all.6 min
- 02How information reaches pricesPrices move when new information (results, filings, economic numbers, central bank decisions, news) differs from what people already expected: only the surprise moves the price.6 min
- 03The macro machine"Macro" is the economy as a whole (output, inflation and jobs) plus the interest rate the central bank sets to steer them, and it is why one number can move every market at once.6 min
Educational material about reading market data, not investment advice.