So I have had this idea for quite some time, and my recent venture into trading stocks on a simulator has inspired me to think more about this. A large premise behind investment trading relies on the price of a commodity or a security, such as gold or shares of a stock, changing between the time of purchase and selling. A problem with investing in either is that these changes in value can occur very slowly, and are never guaranteed to always go one way or the other. So here is my idea:
Some sort of company or organization would facilitate the trading of a special type of security (for which I have no name) known as a ‘unit’. Users would create accounts, and units could be traded between these accounts. Unlike stock shares or commodities, the price at which these units trade would not be determined by supply and demand or such. Rather, the company facilitating the trade of these units would determine the price. All purchasing and selling of units would occur at a price set by this company. The company would, over time, raise the price of the units at a steady rate. For instance, units may trade at 50 cents right now; in one week, they will trade for 10% more, or 55 cents. The price at which a unit trades would only ever rise at a steady and consistent rate, and would never fall, as guaranteed by the company facilitating the trades thereof.
Now with items such as stocks and commodities, the main (or a primary) motive behind their purchase is their value. Commodities such as gold have value for obvious reasons, and stock shares have value due to the dividends they may pay. So where would these units I speak of get their value? Merely the fact that the price will, without doubt, continue to rise, and be tradeable for a profit. The only risk an individual would take in buying these units is the potential problem of being unable to sell them, due to a lack of willing buyers. However, if this risk were to be overlooked by potential buyers, the units would indeed have value and, in theory, should sell.
I have had this idea for years, and I have told several people. Most people tell me it wouldn’t work, and my own intuition tells me it wouldn’t work, but I have no idea why.
So what do you all think? Would this work, or not? I even had one person tell me that my idea sounds a lot like a scam, which is probably true to some extent.
The potential risk of being unable to sell seems like the biggest logistical problem to me. If something of this nature had a large base of users trading at a heavy volume, people would have a more optimistic viewpoint of the idea of trading units. However, a company of my idea may find it impossible to get off the ground without serious amounts of capital to grow a user base, as people wouldn’t trust such a form a trading without first being shown that it works.
This also seems like ‘free money’ to me. What would be the source of the money going into these profits? At least with trading on the stock market, people who make money effectively derive that from other individuals on the market who lose money. Losing money, however, is theoretically not possible with my system (assuming units are sold without resistance).
So yeah, just a random idea I had. Be interested to hear what you folks think of it, and reasons why it may not work.
"Sorry, you can redo your sig...Stupid Mod pressed the wrong button." - JLJupiterCat
