Etc., but this excursion would be incomplete if I didn’t mention another extremely popular and, most importantly, reliable asset for stock trading, namely - . We will talk about them in this article.
As opposed to classical exchange instruments, I would like to cite binary options as an example, in which a trader is able to receive a fixed profit of up to 90% of the investment amount with a contract expiration period of 1 minute or more. With the right money management and systematic trading, binary options can be a great addition. classic views trading and investment.
How to get started in the market binary options? One of the simple and profitable options is a company in which the minimum trading deposit is $10, and the minimum trading position is $1, which will be interesting for those who only want to try this type of trading, or start trading with a minimum investment.
According to the already established tradition, the features of OFZ trading will begin with determining the essence of the asset.
Federal loan bonds are securities issued by the Ministry of Finance Russian Federation. Issued in the form of registered documents, subject to mandatory centralized storage.
OFZ trading on the MICEX and the terms of their circulation can be both medium and long-term. And the owners can be both individuals and legal entities(including foreign ones).
As I said, OFZs are distinguished by centralized storage, and the general agent for their exchange and storage is central bank Russia.
Federal loan bonds listed on the Moscow Stock Exchange can be divided into several large groups:
The nominal value of such bonds is 1,000 rubles, and the circulation period varies from one to five years.
The nominal value is 1000 rubles, the frequency of payments is 1 time per year.
The frequency of payments is 4 times a year. The maturity period is four years.
Term of circulation - from 1 year to 30 (!) years. Denomination - 1000 rubles.
The main advantage of working with federal loan bonds is their high reliability, because the issuer here is not just anyone, but the state itself. Also among the positive aspects of OFZ trading can be identified:
Quotes of federal loan bonds, their yield schedule, current prices and other important things for traders and investors can be found both on the official website of the Moscow Exchange, where an entire section is devoted to OFZ, and on any other financial resource. But, of course, only the exchange and your trading broker will provide the most relevant and timely information.
This is what the yield chart looks like on the website:
Here you can also find the value of the estimated yield of various bonds, indicating their most important indicators.
Basically, that's all I wanted to tell you. If anything in the process of trading federal loan bonds or the conditions on which it takes place remains incomprehensible to you - leave comments, and together we will sort out all the unclear points. In the meantime, that's all, until we meet again.
Sincerely, Nikita Mikhailov
So, the Central Bank raised interest rate by 0.25 punt to 7.5% - which means that the bonds fell, and the yield on them increased. We expected approximately such a development of events and wrote about it in our VK group and also recently published an educational article on bonds on the topic of such a concept as .
Now it's time for the promised bond review. Today there will be only the first part, where we will generally consider those OFZs that may be interesting now, and in the second part we will already give a specific recommendation and buy something in the portfolio ourselves.
Unfortunately, there is currently no access to QUIK terminal- therefore, we will use data from the Moscow Exchange website (there is no duration indicator there and this is bad, which is also why there will be a 2nd part of the review).
Why are we going to watch the OFZ? After all, there are still corporate bonds, the yield on which may be higher. Yes, this is true, but the risks there can be much higher. On the whole, we proceed from the fact that OFZs are the most reliable investment instrument on the Russian stock market (more reliable than a deposit with Sberbank). And this most reliable tool can give a very good profitability. Therefore, we take OFZ, and for more risky investments, we have stocks.
On the website of the Moscow Exchange, I found 39 OFZs. Please note that I have sorted the list by maturity date, from nearest to farthest. That is, as we already wrote in our article about - at the top of the list there will be bonds with a smaller duration (= risk), and at the bottom with a larger one.
OFZ list
I won't cover everything here - you can do it yourself. I'll quickly go through the list and highlight those bonds that might be of interest, but first we need to talk about the search criteria and, most importantly, our selection strategy.
In fact, there are only 2 strategies, in one we increase the Central Bank rate (bonds fall, the yield grows), and in the second it decreases (bonds rise, the yield falls).
In this case, we expect that the Central Bank rate will increase in the future, which means that bonds will fall (so that their yield increases). Then it's better for us:
In this case, we expect that in the future the Central Bank rate will fall, which means that bonds will grow (and their yield will fall). Then it's better for us:
As you can see, it turns out that it is Strategy 2 that plays into our hands - but main question is to find the time when it will begin to be realized. Now it is very difficult to say something unambiguously. We have just seen, on the contrary, an increase in the Central Bank rate, which gives us reason to think about Strategy 1, in which we must behave most carefully.
For the time being, I would suggest looking more towards Strategy 1 (that is, being careful) and at the same time note that buying bonds at a price below par (2 points) is beneficial for us in both cases.
As you can see, the yield grows with the duration (=risk) or the maturity date.
D-Bonds is a trading mode in which defaulted bonds are traded, i.e. bonds, the issuer of which did not fulfill (partially did not fulfill) the next obligations to pay coupon income or face value, or part of the face value.
If a bond is included in the D-bond list, then the issuer of these bonds is no longer able to service its debt in the usual mode and is either in a state where it is threatened with bankruptcy, or is already in bankruptcy proceedings (but not yet recognized as such).
The criterion for getting into D-bonds is
Delay for a smaller number of days, according to the rules of the Moscow Exchange, is a technical default, and in such cases there are no serious sanctions from the Exchange.
But the most important thing to note is that the Moscow Exchange does not formulate the criteria unambiguously and reserves the right to make a decision, depending on the specific situation, taking into account all important factors. To an important factor may include, for example, the importance of the issuer, the volume of securities traded, the number of bondholders, media reports, reports in the disclosure of the issuer's information, etc.
The exchange can make the following types of decisions:
Exclude securities from the list and stop trading in these securities;
leave papers on the list;
leave the securities in the list, but limit the available trading modes - this means the inclusion of securities in the list of D-bonds.
As mentioned above, the d-bond regime limits some trading opportunities. Although the main functionality works. Bidding takes place by (as usual) a counter auction.
Only:
All other bids such as iceberg bids, closing period auction bids are rejected.
There are also no opening and closing auctions themselves.
There is also a mode of negotiated transactions (RPS d-bonds), which allows you to send orders to a specific trading participant and wait for a counter order from him on the same conditions to complete the transaction.
Issuers of bonds traded in this mode have found themselves in a difficult financial situation. Sometimes companies recover their creditworthiness after a default, sometimes they don't and go out of business. The recovery of activity does not always go without loss for investors.
But if you have remained or become the owner of defaulted bonds, the following is safe to say. The procedures for both financial recovery and liquidation are very lengthy. It may take up to five years before the creditor receives payments from the liquidation of the company. Also with financial recovery, which also does not necessarily succeed.
Thus, the D-Bond regime may be the last tool to return at least part of the investment - to sell securities to those who are ready to play long and with huge risk.
Successful investment.
Selling government debt to investors can serve a variety of purposes. At the expense of attracted funds, the budget deficit is covered, state investment programs and projects are financed.
In Russia, public debt management is carried out by the Government, which sets limits on public debt for the next fiscal year, approves the general conditions for the issue and circulation of government debt securities, and also makes other key decisions on this issue. But directly the issue and servicing of issues of government bonds is carried out on its own behalf by the Ministry of Finance, involving the Bank of Russia as a general agent.
The volumes of planned borrowings are regularly published on the official website of the Ministry of Finance and are available for review to everyone. The primary placement of OFZ itself takes place through auctions, which are scheduled to be held on a weekly basis every Wednesday.
The agency also publishes the exact schedule for the next quarter. on the site, however, in some cases, when market conditions do not allow to raise funds at the required rate, the auction may be canceled, as reported in the relevant press release.
The form of holding in the form of an auction allows you to assess the real market conditions and understand at what profitability investors are ready to lend to the state. High level demand allows the state to count on the next placement for more low interest on loans, while low demand, on the contrary, indicates the need to give investors a higher yield or wait for a more suitable market situation.
Who participates in auctions of the Ministry of Finance
Buyers of debt securities in the primary market are mainly large institutional and private investors, who, due to the size of their capital, cannot buy securities in the secondary market without loss in profitability. Also, investors can expect that due to low demand at the auction, they will be able to get more profitable terms than in the secondary market.
Theoretically, anyone can take part in the auction. However, in practice, brokers and banks that provide clients with access to the auctions of the Ministry of Finance may impose certain restrictions on minimum size capital or provide such a service only separate category clients.
For an ordinary private investor, whose investment volume does not exceed 20-30 million rubles, the liquidity in most OFZ issues is quite enough to purchase securities on the secondary market. If you operate with more significant amounts or expect a higher yield, you can contact your broker to participate in the auction.
How is the auction
An auction is held through a special trading system based on the infrastructure of the Moscow Exchange. The day before the auction, a press release is published on the stock exchange's website, which indicates the issues of securities offered at the auction, the time for submitting applications and other features. As a rule, the Ministry of Finance offers two or three OFZ issues at auctions with different maturities.
Bidders can submit two types of bids: competitive and non-competitive. Competitive bids are executed exclusively at the price specified in the bid and may not be fully or partially satisfied by the issuer. Non-competitive bids are satisfied at the weighted average price of the auction if there is an offer.
Why analysts follow the auctions of the Ministry of Finance
Based on the results of the auction, the exchange publishes the results. Based on the weighted average yield formed at the auction, market participants evaluate the fair yield on securities and the general sentiment on the market.
A significant excess of demand over the placement volume or a discount in the yield of the auction compared to the price on the secondary market - these factors indicate high demand and a possible decrease in yield on securities in the future. It also matters, for securities with which maturity the demand turned out to be higher.
On the contrary, if the issue was not fully placed, placed with a yield premium, or the auction was canceled altogether, then this is a clear signal to the market that the demand for securities is low, and the fair yield on the market may be higher than that offered by the state.
Galaktionov Igor
BCS Broker
Yesterday, the Moscow Exchange announced the forthcoming change in the mode of trading in federal loan bonds (OFZ). From April 27, anonymous OFZ trading (in the main section) will only be possible in T+1 mode. This mode involves settlements on concluded transactions in one day and partial pre-deposit Money and valuable papers. Until now, the exchange has been dominated by OFZ trading (as well as bonds in general) in the T0 mode - with settlements on the day of the transaction and 100-deposit. From March 23 to April 26, a transitional period will last, during which it will be possible to make transactions both in T0 and T + 1 modes.
The Moscow Exchange is gradually switching trading on various markets to the T+ mode. Thus, since September 2013, trading in shares, units and RDRs has been switched to the T + 2 mode. In the bond market, there was an opportunity to trade in T+2, but, as before in the stock market, as long as investors had the opportunity to choose, they traded in the mode that was more familiar to them. As a result, for example, according to the results of March 13, the volume of OFZ trading in T+2 amounted to 2 thousand rubles. Now the entire main OFZ market is being switched to T+ mode. After April 27, it will be possible to make transactions in T0 only in the non-anonymous negotiated transactions mode (NTC). “The share of anonymous trading in the total volume of trading in bonds over the past two years has reached 16% for OFZ. Our goal is to offer all categories of participants convenient way trade through partial security of transactions and deferred settlements,” commented the innovation, Managing Director for stock market Moscow Exchange Anna Kuznetsova. The question why the T+1 mode was chosen for OFZ, and not T+2, as for shares, units and RDRs, was left unanswered on the exchange.
The decision of the exchange to transfer the main OFZ trading to the new mode was made on the recommendation of the relevant committee (exchange committees include, in particular, brokers and managers), the exchange said. However, not all market participants believe that the innovation will benefit them. “This mode is not available to managers - brokers do not provide them with partial pre-deposit services, that is, in the event of a paper purchase, the entire amount is blocked immediately,” says Konstantin Artemov, manager of the Raiffeisen Capital bond portfolio. “Our company works mainly with managers, institutional investors who carry out their transactions on the terms of 100% security, regardless of the trading mode,” says Alexei Kuznetsov, Chairman of the Board of Directors of BC Region.
Market participants working with institutional investors believe that the new OFZ trading regime could be of interest to retail investors. “The popularity of debt instruments is also growing among private investors, whose share in the OFZ trading volume reached 6%,” notes Anna Kuznetsova. However, brokers working with private investors reacted rather indifferently to the innovation. "For individuals, which are the basis client base“Opening-broker”, there is no fundamental difference between T0, T + 1 and T + 2 for OFZ trading,” says the CEO brokerage company"Discovery" Yuri Mintsev.
