Acquisition and Liquidation

TradeTrax tries to avoid the terms "buying" and "selling" as they mandate a direction in which money and assets flow. Instead, the terms "acquisition" and "liquidation" are used to indicate that something changed hands and potentially, money was paid paid for it. This abstract concept is best explained with use case.

Use case #1: Antiquary

An antiquary buys antiquities in the hope of reselling them later for a higher price. This is the classic scenario in which "acquisition" actually means buying and liquidation actually means "selling" with the implication that money flows in the opposite direction of commodities.

Use case #1: Greengrocer and garbage collection

Like the antiquary, the greengrocer buys commodities in order to resell them for a higher price. But unlike antiquities, vegetables can spoil and have to be thrown away. Worse yet, there is likely a fee for waste removal. In this scenario, money and wares flow in the same direction as the grocer will have to pay the garbage collector to take the stock. Technically, both parties liquidate and acquire for a negative amount of money.

Use case #3: Stock market

Stock brokers may sell stock short. In a nutshell this means selling off borrowed stock in the hopes of buying it back for a better price. In this scenario, the stock broker actually acquires a debt (negative flow of stock).