What are some of the ways that companies reward long term investors for not daytrading them?

Question

Alex, day traders that move in and out of a fund for no reason are not liquidity traders. They are manipulators. If a company provides a good product at a good price and has good news about it, why would someone sell that stock?

If the company needs money they can sell more stock and get liquidity. They can borrow money at a bank. They don't need daytraders to do that!

Right now, day traders provide confusion with calls and puts, betting on a company's success or failure instead of buying stock in that company.

To me, day traders should not be allowed to sell stock in a company for a given period of time if they buy that stock, especially anything linked to large conglomerations doing such. That should be illegal. SEC really needs to look into the collusion of large blocks of stock moving negative on good news in a company!

Answer 1

off hand, the only thing I can think of is that only share holders as of the close of business [trading] receive dividends and rights [if and when any are offered]. Voting is also for registered holders as of the close of business only.

thus, day traders wouldn't get these.

[Btw, in case you're wondering, the exchanges do check for adequate funds -- if the purchase fails because the buyer can't settle later, ownership on the company's books is reversed out and the buyer who didn't/couldn't pay receives none of these rights and/or benefits.]

Answer 2

Alex is absolutely right. Why should a company care diddley about the intraday fluctuations in its share price. Daytraders don't manipulate the price direction of a stock, they simply take advantage of it. Daytraders don't bet on the success or failure of the company. They simply take advantage of normal intraday price fluctuations.

Daytraders add liquidity to the markets. I suggest that you go to investopedia.com and study up on the stock market.

Answer 3

Daytraders do not harm the company. So there's no reason to reward the long term investors. Daytraders are liquidity providers, who help long term investors to buy and sell their investments.