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The Future of Democratized Stock Trading

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The sophistication and accessibility of technology has made it easier than ever for average people to get involved with investing in and trading stocks. In the future, as new technologies continue to emerge, it’s going to become even more accessible. This “democratized” stock trading could completely change how we think about investing—and how the average person performs economically.

So what exactly does the future hold, and how can we control for even better outcomes?

Current Technology Trends

Current consumers have access to a wide range of technologies related to finance. With banking apps, they can quickly send and receive money digitally, without leaving their homes. With budgeting apps, they can plan out their individual finances and save money for whatever they desire.

More importantly, they also have access to brokerage apps, which allow them to buy and sell stocks, bonds, and index funds as often as they like. Many such apps are switching to offer zero-commission trades, meaning you won’t have to pay a transaction fee for each trade you make. And with most apps offering low or nonexistent account minimums, people can get involved in trading with just a few thousand, or even a few hundred dollars.

This is complemented by the prevalence of apps meant to help investors make better decisions, all with the help of stock APIs. A stock API is a programming interface that provides real-time financial data to a source that requests it. For example, a developer working on a data dashboard might use a stock API to provide dashboard users with accurate, up-to-the-minute data on individual stock performance or broader performance metrics. With better APIs, developers can make even better apps—and consumers can become even more educated, ultimately making better investment decisions and feeling more “in tune” with the market.

Trends are also moving toward machine learning and artificial intelligence (AI). Algorithmic trading, which relies on data derived from stock APIs, uses machine learning and intelligent decision making to buy and sell assets on users’ behalves. Rather than being forced to conduct individual research and make risky decisions, investors can rely on the performance of an impartial, data-driven algorithm.

The Benefits of Democratized Stock Trading

Already, democratized stock trading has had a number of positive effects, which should increase even further in the future:

  • Stock investing for all. The stock market has historically performed well, with occasional bear markets and recessions that temporarily disrupt earnings. Generations of people have used it as the cornerstone of their retirement planning strategy and used it to generate wealth. However, many people have avoided investing in the stock market because they don’t have the available capital, because they were too intimidated to try and figure out how to invest, or because they were afraid of making a bad decision. Now, the democratization of stock trading has made it possible for anyone with a bit of extra cash and an internet connection to get involved in investing.
  • Higher overall financial knowledge. The accessibility of real-time stock market data and other financial data is also playing a role in boosting overall financial knowledge. Fiscal literacy has always been a problem, especially in the United States, and while the introduction of a few new apps won’t immediately change that, the downstream effects can be highly positive. Experienced investors now have faster, more accurate channels where they can learn more about their investing prospects, and total newbies can dive into investing even if they’ve never considered it before. Additionally, the prevalence of stock API-based apps is increasing the popularity and public perception of stock investing, leading to more independent learning.
  • Wealth distribution. Regardless of how you feel about it politically, there’s a massive wealth divide in the United States; the wealthiest people control far more capital than the poorest people, proportionally. And because capital can be a source of further growth, that becomes problematic—especially over the course of multiple generations. But when even the poorest members of society have access to a mechanism of financial growth, it becomes possible to build a more equitable distribution.
  • Funding opportunities. Some people view stock investing as unidirectional, but remember, the entire reason the stock market exists is to allow businesses to attract more funding for growth. If you’re considering starting a corporation and you’re interested in raising capital to expand, the stock market is one of your best options; more people investing means more prospective investors you can call upon to gather the capital you need.
  • Financial opportunities. There are also opportunities for software developers and financial experts. With the availability of smarter, more reliable stock APIs, developers can create apps and tools that other people can use to improve their knowledge or improve their investing approach. This is both financially rewarding for the people creating the tools and practically useful for the people using them.

Repercussions of Democratized Stock Trading

Are there any repercussions or side effects as a result of higher access to stock trading?

  • Individual risk. As with any financial endeavor, the individual bears some level of financial risk. In a world of democratized stock trading, individual investors are left to their own devices to perform due diligence and assess risk. If non-experts are allowed to buy and sell assets at their own discretion, it could leave them with higher losses. The stock market has historically performed well over long periods of time, and assuming a diversified position, but this is still no guarantee of success—especially if individual investors are ignoring conventional advice or making emotionally reckless decisions.
  • Economic bubble formation. Economic bubbles have the potential to bear significant economic consequences, including the development of large-scale recessions. Bubbles begin to form when an asset becomes overvalued, or overly popular; with too many people buying in, prices skyrocket beyond reason, and an untenable number of investors hold the asset. Later, the bubble “bursts,” prices plummet, and consumers and institutions alike lose millions (or even billions) of dollars of collective value. More people investing in a collection of assets could make it easier for such a bubble to form.
  • Flash crashes. We also need to consider the potential consequences of algorithmic trading. Stock trading algorithms tend to make decisions much faster and at much higher volume than individual investors, which can trigger events like “flash crashes,” where the prices of a given asset or collection of assets plummets seemingly spontaneously. Fortunately, the market has already taken measures to correct for events like these in the future; “circuit breakers” shut down the market if a period of activity is too volatile or destructive, as a safety mechanism to prevent further undue losses.
  • Price inflation. Over time, the democratization of stock investing will increase demand and trading activity. More people will be buying and holding stocks, which can drive relative prices higher. In some ways, this could represent a higher barrier to entry for the next generation, but it also provides an avenue of growth.

Adapting to a New Environment

Overall, the democratization of stock trading doesn’t seem to be an inherently good or bad development. More individuals are going to have access to prospective investment growth, but they’re also going to be exposed to more risk. People will be better financially educated, but highly volatile, unpredictable events are still going to flourish.

It’s important not to view democratized and algorithmic stock trading in terms of good or bad, but instead acknowledge that it’s a complex new environment with astounding new opportunities. The accessibility of new information, particularly with the help of stock APIs and new apps, is never a bad thing. However, it will take time for the market (and individual investors) to adjust to the new possibilities. As technology continues to advance, we’ll need to adapt to those changes even more rapidly.

The post The Future of Democratized Stock Trading appeared first on ReadWrite.



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UK loses out on lucrative EU satellite contracts because Brexit

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Sentinel-1, the first in the family of Copernicus satellites, is used to monitor many aspects of our environment (ESA)

The UK has missed out on a potentially lucrative contract to build satellites for the EU’s Copernicus Earth programme.

The programme is one of two big space projects happening in Europe and aims to map all elements of planet Earth – from atmospheric conditions to ocean and land monitoring.

And now the European Space Agency’s industrial policy committee has given contracts for six new satellites to various firms in Germany, France, Italy and Spain.

In total, the contracts are worth more than 2.5 billion euros and the UK space industry was very much hoping to get a piece of the pie. Especially considering the UK is the fourth largest contributor to the European Space Agency.

Airbus Defence and Space Germany will lead the development with a contract value of €300 million.

‘While UK organisations will play important roles in five out of the six Copernicus High Priority Candidate missions, we are disappointed overall with the contract proposals and abstained on the vote to approve them,’ a spokesperson for the UK Space Agency (UKSA) said.

‘We are committed to working closely with ESA to ensure our investments deliver industrial returns that align with our national ambitions for space.’

The reason for the snub? Part of it is due to Brexit.

Undated handout photo issued by the ESA of representatives from the agency's member states gathered for a ministerial council. The UK Space Agency has committed ??374 million a year to the European space programme. PA Photo. Issue date: Thursday November 28, 2019. The funding will contribute towards international space initiatives to address climate change, deliver high-speed mobile technology and return the first samples from Mars. See PA story SCIENCE ESA. Photo credit should read: Stephane Corvaja/ESA/PA Wire NOTE TO EDITORS: This handout photo may only be used in for editorial reporting purposes for the contemporaneous illustration of events, things or the people in the image or facts mentioned in the caption. Reuse of the picture may require further permission from the copyright holder.

Representatives from the ESA’s member states (Stephane Corvaja/ESA)

Although Britain is a member of the ESA and can contribute to the R&D elements of Sentinel (the missions that make up Copernicus) we can’t participate in the manufacturing because that’s funded by EU member states. Which the UK is no longer a part of.

The government is currently trying to negotiate ‘third country’ membership of Copernicus to try and become an industry partner of the missions – but the future is uncertain.

And Copernicus is only one of the EU’s big space projects – the other is called Galileo and is a navigation network of satellites that will rival the USA’s Global Positioning Satellite (GPS) system.

The European Space Agency's ExoMars rover is being prepared to leave Airbus in Stevenage. The ExoMars 2020 rover Rosalind Franklin is Europe?s first planetary rover it will search for signs of past or present life on Mars. PRESS ASSOCIATION Photo. Picture date: Tuesday August 27, 2019. See PA story SCIENCE Mars. Photo credit should read: Aaron Chown/PA Wire

The European Space Agency’s ExoMars rover was built at Airbus in Stevenage. (Aaron Chown/PA Wire)

Speaking to the BBC, the ESA’s director of Earth observation, Josef Aschbacher, said there was no bias in awarding the contracts.

‘We can only evaluate what we get in terms of offers,’ he said.

‘If industry shies away from some work packages or activities located in the UK, there is nothing we can do on our side. We have to take what comes to our table.’

The UK space industry is no slouch, it helped build the ESA’s Solar Orbiter space probe which is tasked with getting ridiculously close to the sun in order to better understand our parent star.



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Binary vs. Source Packages: Which Should You Use?

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Regardless of the package manager you use, there are two broad ways of installing programs on Linux. You either use a pre-built package, or you compile the program yourself. These days, the former usually wins out by default, but there are times when you may want to consider compiling from the source coude.

What Are Binary Packages?

deb package format

Installing programs on Linux is usually quite different from the traditional way of installing software on Windows. Rather than downloading an installer off a vendor’s website, the files come from a repository of programs that is usually tailored to your Linux distribution. You access this repository using a Linux package manager or a Linux app store.

The files that make up the programs in these repositories come in an archive format. This bundles everything into a single file for easy access and distribution. Debian, for example, uses the DEB format to store and distribute programs. These bundles are called binary packages.

You need a special program to extract these files and install them onto your computer, typically your package manager or app store. These tools also perform other useful functions, such as keeping track of what files you have installed, and managing software updates.

Where Do Packages Come From?

All software consists of lines of text known as source code, written in specific programming languages, such as C or C++. You generally can’t just bundle this source code into an archive and call it a package. These lines need to be translated into a language your computer can understand and execute.

This process is called compiling, the end result creating binaries that your computer can run. The difference between packages and software is that software binaries are stored together inside a package, along with other things such as configuration files.

What Is Installing “From Source”?

emacs makefile

Installing a program “from source” means installing a program without using a package manager. You compile the source code and copy the binaries to your computer instead.

Most of the time, you can download a project’s source code from hosting services such as GitHub, GitLab, or Bitbucket. Larger programs might even host source code on a personal website. The code will usually be zipped up in an archive format (also known as a source package).

A special set of tools help automate the building process. On Linux desktops, this often comes in the form of a command line program called make. Source code written in different languages need specific compilers and commands to change them into binaries. The make program automates this process.

For this automation to work, programs provide make with a makefile that tells it what to do and compile. These days, it’s usually automatically generated by special software such as CMake. This is where you come in. From here, you can specify exactly what features you want compiled into your software.

Building “From Source” Example

For example, the command below generates a configuration file for the Calligra Office Suite using CMake. The file created tells the make program to only compile the Writer component of Calligra.

cmake -DPRODUCTSET=WORDS -DCMAKE_INSTALL_PREFIX=$HOME/kde/inst5 $HOME/kde/src/calligra

Having done this, all a person has to do is run the make tool to compile and copy the results onto their computer. This is done in the following way:

make
make install

While this is the general pattern for compiling programs, there are many other ways to install source packages. Gentoo Linux, for example, has a built-in way of handling this, making the process much faster and easier. But building binary packages takes a few more steps than just the above commands.

Benefits of Using Binary Packages

If you’re using Linux, someone more than likely pre-compiled the software you have installed. This has become much more common than using source packages. But why?

Binary Versions are Easier to Manage

deb package format

Binary packages contain much more than just compiled installation files. They also store information that makes it easy for your package manager to keep track of all your programs. For example, DEB files (the package format for Debian and Debian derivatives) also contain important information such as what other software the program needs to run, and its current version.

This makes packages much easier to install, as you don’t need to worry about what other files you need to successfully make a program run. Your package manager can read that information from the package itself and downloads all the necessary dependencies automatically.

When installing programs from source, unless you compile the code into a binary package of its own, you will be in charge of managing that software. You will need to keep in mind what other programs you need to make it work, and install them yourself.

Binary Versions Have Improved Stability

The people who maintain repositories for your package manager tend to test binaries for problems and do their best to fix those that appear. This can lead to improved stability of programs, something a person who installed from source might miss out on.

Plus packages usually must adhere to a strict set of rules to help ensure they will run on your system. Both Debian and Ubuntu have a policy manual for example, as do many other Linux distributions.

Some programs also rely on different versions of the same software dependency to run. Package repositories do their best to resolve these conflicts so you don’t have to worry about this.

Benefits of Compiling Source Packages

Installing programs from source isn’t something that everyone needs to do, as it’s generally easier to maintain your PC if you stick with binary packages. Even so, there are still some advantages to using this slightly more involved way of installing programs.

Source Code Offers Latest Software

One disadvantage of making programs more reliable is that it takes time to improve and fix. As a result, this can lead to you using older versions of software. For people who want the latest and greatest, they might even prefer a bit of instability in exchange for it.

While there are Linux operating systems which cater for this need without compiling programs, they do have a few drawbacks. For example, software that doesn’t frequently release set package versions is harder to keep up to date in a repository, than installing from source.

This is because binary packages are usually made from official releases of programs. As such, changes between these versions are usually not taken into account. By compiling your own software from source, you can benefit immediately from these changes.

It’s also possible that your Linux operating system doesn’t have the software you want pre-made for you. If that’s the case, installing it from source is your only option.

You Can Pick and Choose

ffmpeg features

Another benefit to using source packages is that you gain more control over the programs that you install. When installing from a binary repository, you’re restricted in the ways you can customize your packages.

For example, look at FFmpeg, the command-line-based audio and video converter. By default, it comes with a huge number of features, some of which you might never even touch. For instance, JACK audio support is available in FFmpeg, even though this software is usually used in production environments only.

Compiling FFmpeg allows you to remove the things you don’t want from it, leaving it lighter and tailored to your needs. And the same applies to other heavyweight programs.

When resources are scarce, removing features can be a great way of lightening the load. It’s no wonder that Chrome OS, found on many low-end computers, is based off Gentoo Linux. Gentoo, being source-based, compiles a lot of its software, potentially making these systems run much lighter.

Why Not Install With Both?

While you probably won’t want to compile packages on a daily basis, it’s something useful to keep in mind. That said, with new universal package formats available from sites such as the Snap Store and Flathub, you’re less likely to need to build from source to get the latest software.

Read the full article: Binary vs. Source Packages: Which Should You Use?



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If you’re over 75, catching covid-19 can be like playing Russian roulette

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Are you hiding from covid-19? I am. The reason is simple: the high chance of death from the virus. 

I was reminded of the risk last week by this report from the New York City health department and Columbia University which estimated that on average, between March and May, the chance of dying if you get infected by SARS-CoV-2 was 1.45%.

That’s higher than your lifetime chance of getting killed in a car wreck. That’s every driver cutting you off, every corner taken too fast, every time you nearly dozed off on the highway, all crammed into one. That’s not a disease I want to get. For someone my mother’s age, the chance of death came to 13.83% but ranged as high as 17%. That’s roughly 1 in 6, or the chance you’ll lose at Russian roulette. That’s not a game I want my mother to play.

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The rate at which people are dying from the coronavirus has been estimated many times and is calculated in different ways. For example, if you become an official covid-19 “case” on the government’s books, your death chance is more like 5%, because you’re sick enough to have sought out help and to have been tested. 

But this study instead calculated the “infection fatality ratio,” or IFR. That’s the chance you die if infected at all. This is the real risk to keep in view. It includes people who are asymptomatic, get only a sniffle, or tough it out at home and never get tested. 

Because we don’t know who those people who never got tested are, IFR figures are always an estimate, and the 1.45% figure calculated for New York is higher than most others, many of which fluctuate around 1%. That could be due to higher rates of diabetes and heart disease in the city, or to estimates used in the study. 

It’s also true that your personal odds of dying from covid-19 will differ from the average. Location matters—cruise ship or city—and so do your sex, your age, and whether you have preexisting health conditions. If you’re in college, your death odds are probably lower by a factor of a hundred, though if you’re morbidly obese, they go back up. Poor health—cancer, clogged arteries—also steeply increase what scientists call the “odds ratio” of dying. 

The biggest factor, though, is age.  I looked at the actuarial tables, and the chance of death for a man in my age group (I’m 51) is around 0.4% per year from all causes. So if I get covid-19, my death chance is probably three times my annual all-cause annual risk (since I am a man, my covid-19 risk is higher than the average). Is that a chance I can live with? Maybe, but the problem is that I have to take that extra risk right now, all up front, not spread out over time where I can’t see or worry about it. 

On Twitter, some readers complained that average risks don’t tell them much about how to think or act. They have a point. What’s a real-life risk that’s similar to a 1.45% chance of dying? It wasn’t easy to think of one, since mathematically, you can’t encounter such a big risk very often. Skydiving, maybe?  According to the US Parachute Association, there’s just one fatality for every 220,301 jumps. It would take 3,200 jumps to equal the average risk of death from covid. 

Risk perceptions differ, but it’s the immense difference in IFR risk for the young (under 25) and the elderly (over 75) that really should complicate the reopening discussion. Judging from the New York data, Grandpa’s death chances from infection are 1,000 times that of Junior. So yes, we need schools to keep kids occupied, learning, and healthy. And for them, thank goodness, the chances of death are very low. But reopening schools and colleges has the ugly side effect that those with the lowest risk could be, in effect,  putting a gun to the head of those with the highest (although there is still much we do not know about how transmissible the virus is among children).

Decent odds

The virus is now spreading fast again in the US, after the country failed to settle on a strong mitigation plan. At the current rate of spread—40,000 confirmed cases a day (and maybe five to 10 times that in reality)—it’s only two years until most people in the US have been infected. It means we’re pointed toward what, since the outset, has been seen as the worst-case scenario: a couple of hundred million infected and a quarter-million deaths. 

By now you might be wondering what your own death risk is. Online, you can find apps that will calculate it, like one at covid19survivalcalculator.com, which employs odds ratios from the World Health Organization.  I gave it my age, gender, body mass index, and underlying conditions and learned that my overall death risk was a bit higher than the average. But the site also wanted to account for my chance of getting infected in the first place. After I told it I was social distancing and mostly wearing a mask, and my rural zip code, the gadget thought I had only a 5% of getting infected. 

I clicked, the page paused, and the final answer appeared: “Survival Probability: 99.975%”. 

Those are odds I can live with. And that’s why I am not leaving the house.



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