The history of the stock market goes far into the past. Already in the 13th-14th centuries, bill markets and periodic fairs were actively working. They act as a kind of prototype of the modern securities market. The first operations carried out with securities took place in the 16th century, it was then that the first exchanges began to appear in Lyon and Antwerp. stock exchange and stock market in the modern sense were established at the end of the 16th century, in parallel with the emergence of joint-stock companies.
The oldest is the stock exchange in Amsterdam, which began operating in 1611. It was she who became the first place where margin operations and futures REPO and DEPO transactions were practiced. The culmination of the development of the international stock market was the opening of the New York Stock Exchange. It was here that the first investment mechanisms in history were developed and put into practice for the first time. It became the basis for the formation of multibillion-dollar financial empires, in particular Rockefeller.
The stock market is a regulated component that provides the opportunity to trade securities not only on the exchange market, but also on the over-the-counter market. Consequently, the concepts of "stock market" and "securities market" are by and large synonymous. The international stock market is a set of markets of all countries that are integrated into a single whole and allow financial manipulations with securities. It can be concluded that the international stock market is nothing more than an integral part of the world capital market, which, in tandem with money market is, in fact, a global financial system.
The global stock market belongs to the category supranational structures. It integrates the stock markets of all world states. At a time when domestic markets are either individuals, or legal, on the international platform, the states themselves are represented as participants in trade. Almost all participants in the world economy have access to the platform, and their location does not affect this fact, which automatically makes the market both global and universal.
The stock market is, to some extent, a tandem of multinational companies, international stock exchanges, brokerage houses, dealers, and government agencies, and financial institutions. Institutions such as banks, insurance agencies, government agencies also take part in the life of the market. financial services capable of influencing the movement of the market. All transactions within the market can be differentiated into two categories. Commercial manipulations are mutual settlements between the parties for export and import operations. Financial manipulation is the flow of capital between the most various areas economy.
The stock market for securities can be called an institution or mechanism that provides a basis for interaction between buyers, who are demanders, and sellers, who act as providers of value. The stock market can be divided into primary and secondary. Each subtype of institute performs a clear list of tasks.
The primary market is the market for stocks and bonds, short-term government-type bonds and loans, federal loans. The concept includes the bond market currency loan and treasury bills, gold certificate with financial instruments. According to the legislation, the primary market is defined as the relationship that is formed during the issuance in the aspect of investment securities or during the implementation of civil and legal transactions between persons who have assumed the full range of obligations under securities, and investors, professional participants financial industry or their representatives.
The primary market can be called the market for the first or repeated issues of securities, within which their primary distribution among investors is realized. Information on securities, including prospectuses, registration and control by state bodies, inclusive, is completely open to investors, which allows them to make a rational and deliberate choice of the latter.
The primary market is presented in two formats. This is a private placement, with its inherent sale of securities to a strictly limited number of investors, predetermined (no public offering), and public offer, which is carried out by publishing a public announcement (includes the sale of shares to an unlimited number of investors).
The secondary financial and stock market includes stock exchanges and the stock departments of commodity exchanges dedicated to pre-issued shares and financial instruments. The concept implies relations that are formed during the rotation of securities previously issued within the framework of the primary market. The secondary market is based on transactions that reinforce the redistribution of spheres of influence foreign investment, with separate speculative operations inclusive.
Securities are divided into organized (or unorganized or over-the-counter (street). The secondary stock market provides a stable structured restructuring of the economy in order to increase its efficiency. It is mandatory for the existence of the securities market, like the primary one. A characteristic feature of the institution is liquidity, becoming a help for the implementation of successful trading and for the ability to absorb a large number of securities in a short time. At the same time, exchange rate fluctuations remain at an insignificant level, and implementation costs are minimal. The mechanism of trading in the secondary market ensures the stability of the market itself and limits speculation.
The stock market is universal financial structure which affects many areas of activity. The institution affects business, as it is inherently the most in a simple way receive finance for the development and prosperity of a young corporation. When a start-up company sells shares, a share of ownership, it receives capital that does not need to be returned and on which interest is not required, as is the case with obtaining a loan from a bank. Shares turn into money not only with great speed, but also with large dividends.
Share prices, which are largely formed by the stock market participants themselves, have a direct impact on the state of the economy and act as an indicator of social sentiment. An economy in which the stock market develops is considered to be developing, and the country is considered strong and prosperous. Trading in the stock market opens up great prospects for ordinary people. Bidders who do not have large capital can become co-owners of shares of large global concerns and receive stable profits from them in the future.
The Russian stock market, until recently, over the past four years, showed active growth rates, which emphasized its dominant role in the development of the state economy. At the first stages of its development, the market played the role of distributing property within the country, but today its main purpose is to attract foreign capital to the Russian economy. At the moment, the capitalization of the domestic stock market is $498 billion, which is 80 percent of the country's GDP.
Experts predicted that, despite the crisis, in 2015 the market capitalization will be increased by 2.5-3 billion. In fact, the situation has only worsened, and the entire stock market today is cheaper than stocks. Apple. Statistical analyzes clearly show that the development potential that the Russian stock market has has not yet been exhausted. The prosperity of the institution is a prerequisite for ensuring sufficient high level competitiveness in the battle for global investors in the international stock market. Not only individuals are interested in the development of the market, but also enterprises that wish to attract investments through bonded loans.
The Russian stock market has serious problems associated with problems in the legislation, with a low level of development of investor activity, with the underestimation of companies and the lack of a corporate culture. At the same time, according to world experts, the Russian stock exchange currently belongs to the category of the worst in the world, despite its good potential. This fact is evidenced by the RTS dollar index, which has fallen by more than 50 percent since the beginning of 2014.
Things are worse only in the market of Ukraine, Portugal and Greece. The ruble is systematically weakening against the dollar. The latest post-bid figures were below the 60 ruble mark, the biggest intraday drop since 1998. The statements of the Central Bank, which voiced a forecast for next year, based on the price of oil at $60 per barrel, which is absolutely untrue, pushed the fall of the currency. Investors are losing interest in the Russian market, which is reflected in the state of the economy.
In contrast to the situation in which the Russian stock market is today, its American counterpart is considered the most liquid in the world. Within its limits is conducted by the world's largest companies. These are not only shares of corporations and securities of foreign organizations, but also depositary receipts, exchange-traded funds, and many other instruments. The American Stock Exchange in New York serves as a trading platform for second-rate securities. In the early stages of its development, the exchange was presented in the format of an open-air square on Wall Street, where deals were made. Only since 1921, the trading area has moved to a covered area.
To be able to invest in the American stock market, you need to open an account with one of the brokers, which is focused on providing services to traders from Russia. Each broker has specialists who will tell beginners what and how to do. The rating of stock market brokers indicates that it is preferable to cooperate with companies such as Finam and Capital Management, Insta Trade and United Traders, INVEST. which, according to a number of criteria, were determined by the world's best agencies as the most reliable.
The Russian stock market is fundamentally different from the American one, which determines the specifics of trading on the latter. Let's start with the fact that transactions within the platform are concluded between bidders. Spread losses are not required. Market participants can not only accept or reject prices, they can offer their own. Within the framework of the exchange, each trader gets access to information that includes not only the price chart. A trader can evaluate the volume of transactions, the depth of the market, the tape of prints and "imbalances".
The stock exchange offers a huge range of trading instruments, of which there are at least 6.5 thousand, which automatically provides excellent opportunities for competent risk diversification. Trading on the exchange can be carried out daily, since the number of shares is very large, and it is very easy to find the optimal ratio of risks and rewards. In order to start active trading in shares, you need a deposit of at least a thousand dollars. Companies offering to start with $500 offer very unfavorable trading conditions. You have to pay for it separately, but the profit from trading more than covers all costs.
The capitalization of the American market is equal to many trillions of dollars, which makes it attractive to investors from all over the world. And within the market there is a huge number of both undervalued stocks that will make good money, and a large number of overvalued stocks that open up no less broad prospects. Experts recommend developing long-term investment projects, rather than rely on momentary profits and quick income.
In this section you will find basic, reference articles. They serve as the basis for understanding all other parts of the site. The concepts and concepts discussed here are relevant not only for stock exchanges.
Most of the topics will be of interest to novice investors, even if they focus on other financial instruments (from the simplest - index funds to option contracts.
This will not make you a capitalist, but it will help you quickly get up to speed and easily assimilate other, more complex and close to practice concepts.
However, you can do the opposite (especially if you already have some experience and knowledge). Refer to this guide as problems and difficulties arise. It is convenient to search for various terms through the site search form.
When studying texts and diagrams, one should remember the basic principle: "knowledge is not for the sake of knowledge, but for the sake of money." When reading, try to understand where the information offered can be useful to you personally. In this case, it will be especially useful if the answer is not obvious. If you think that you should not know some data, then this means that there is a gap in knowledge or understanding of how financial markets work. Of course, this gap needs to be corrected.
Our readers have been asking for more information about investing in stocks. To tell something really useful, you need to state a very large amount of information. Investing in stocks is a topic for a good thick book, not an article. That's why I.Q. Review prepares a series of educational articles on investing in securities. To begin with, the reader is offered a training article that covers the basic terms and basics of making money on stocks “for dummies”.
By starting this educational project, we would like to give the maximum useful information and a minimum of dry definitions. But the abundance of terms in the subject and the different level of initial preparation of readers does not allow for a dialogue with everyone in the same language. Therefore, we will give the basics “without water” and we will go from the general to the particular, going deeper and concentrating precisely on making money.
It is impossible to start talking about investments and avoid this issue. Companies in Russia may have different statuses in terms of their organizational and legal form. Here are the most commonly used forms:
There are some other less popular de facto forms - partnerships, cooperatives, etc. If you haven't heard yet, the federal law dated May 5, 2014 No. 99-FZ amended the Civil Code of the Russian Federation, significantly reducing the number of options for registering companies and non-profit organizations. Therefore, now there is a possibility of confusion of concepts. Previously, there were open and closed joint-stock companies (JSC and CJSC). Now there are public and non-public companies.
All this is difficult to perceive for the first time, but there is good news: it is not important for making money on stocks and can be put out of your head right now. We will only be interested public joint-stock companies (JSC, PJSC), they are also public companies.
public joint-stock company or OJSC - a form of organization of the company, characterized by free circulation of shares on the market and an unlimited number of shareholders.
So, we have come to the concepts of “share” and “shareholder”.
Stock- a security that gives rights to a part of the property and profits of the company in proportion to the share in the total capital.
Shareholder- the owner of one or more shares of the company.
This basic information raises more questions than it answers. Who can become a shareholder? If it is a security, then where to buy it, what does it look like and how to store it? How much does one share cost and how much money does it bring? Where can I find a list of public joint stock companies? And a bunch of other questions, the answers to which are critical to investing in stocks. Let's talk about everything in order.
In addition to shares, securities include bonds, bills of exchange and some other little-known financial instruments. We will not talk about them, because they are not suitable for making money - they are inaccessible to the layman.
When people say “securities”, people usually imagine some kind of certificates with the name of the owner, a bunch of holograms and degrees of protection, which are stored in the safes of the rich in secure cottages or bank vaults. All this today has nothing to do with reality. Shares of public companies today are non-documentary non-registered securities. The reality is that they are just an entry in a computer database. In practice, this makes it possible to instantly buy and sell shares, changing only the name of the owner in the database, called share register .
Such a scheme may raise doubts about the reliability. What if someone rewrites my name in the electronic registry without my knowledge? To prevent this from happening, the lists are maintained by a specialized organization called registrar . Anyone cannot be a registrar, this is an activity licensed directly by the Central Bank. There are no cases when the rights to someone's shares of a public company were simply transferred to another person without the knowledge of the owner, there was not and cannot be - until the next communist revolution, at least.
As mentioned above, using the possibilities of modern electronic document management, the stock can be quickly sold and bought. But what if it changes hands several times a day - each time to make an entry in the registry? For billions of shares in the market, this is quite difficult! Therefore, if you want to buy shares on the market, your shares will not be held by the registrar, but in depositaries . This is an organization that rewrites the rights to shares based on the results of trading on the stock exchange every day.
The depositary is a nominal shareholder. That is, in the list of the registrar, instead of thousands of small shareholders, a record is kept of the number of shares in the depository, and the depository maintains lists of small shareholders and accrues dividends to their accounts. This is also not a sharashka office, but a respected organization. Since November 6, 2012, the National Settlement Depository, formerly known as CJSC NCO NSD, has the status of the Central Depository of the Russian Federation. Under standard conditions, by default, your shares will always be located there.
All this is very boring information that you will not need in practice to trade stocks. . It is presented here so that you understand that investing in stocks is safe . Smart people for years, they thought over mechanisms so that no one could just take away shares from a private investor. If you invest money in securities, no one will “throw” you. In Russia, a number of state institutions and laws protect your interests. First of all, it monitors that you are not “thrown” federal Service on financial markets, directly subordinate Central Bank Russian Federation, which can punish any public company.
Alice, trader:
“You should not listen to the representatives of the older generation in this matter, they lived in other realities and do not understand at all what kind of beast such stocks are. People are afraid of everything unknown, so you can hear only one negative from them:
- Completely crazy, they will take away the money, better give it to your mother!
- Where are you carrying the money, better keep it under your pillow, this is Russia, they will throw it at any moment!
- How is money stored in a computer, they will steal it while you sleep, it’s better to put it on a passbook!
- Some kind of nonsense, it's better to store it on a card!
And so on, you will hear similar phrases from parents, grandparents and acquaintances. All these typical phrases have one thing in common: someone else knows BETTER what to do with your money . And do you agree with this?
Let's finish with boring general terms and move on to the exchange mentioned above.
MICEX logo There are many stock exchanges in the world. Probably, we have already tortured you with names and terms, so we will skip the story. The Russian stock market today is represented by one large organization - Moscow Exchange. If you have heard the terms , RTS or MICEX-RTS- it's all the same today, united Moscow Stock Exchange. Remember this logo.
Everyone has probably watched some kind of stock market movie - the recent "Wolf of Wall Street" with DiCaprio, classics like "Boiler Room" or "Wall Street" with Michael Douglas. So, throw everything you saw out of your head: a hall with telephones and nervous people, a platform where everyone screams and throws some papers up.
All this is long gone, all this has nothing to do with the modern stock exchange and its interaction with private individuals.
Stock Exchange - an electronic platform for trading shares and other securities.
That is, physically the stock exchanges exist, the buildings are standing. Here is the NYSE building.
New York Stock Exchange But this has nothing to do with you. Why?
Let's say you want to buy Gazprom shares. How to buy Gazprom shares for a private person? Well, of course, go to the stock exchange! No, not true. Through the Moscow Exchange, 55,000 individuals buy and sell shares every month (as of 2014). Think about whether one small building can handle the influx of people? Hardly. Therefore, the exchange works only with licensed participants in the securities market - brokers. Exactly the same situation as with depositories - this is an intermediary for convenient organization of the process of trading in shares.
stock broker - a company that provides private individuals with access to trading on the stock exchange from home via a computer.
A stock broker is exactly the organization that will contact you directly for all issues related to stock trading. You contact one of the brokers, sign an agreement and get access to the stock market through an electronic terminal on your home computer.
Companies issue shares, the exchange admits them to trading, individuals and legal entities they buy and sell shares, creating orders through a broker, the lists of shareholders are kept by the registrar, and the transfer of shares from hand to hand is counted by the depository. Here how the stock market works in outline.
In general, we have just finished, as they say, with flowers and in the next part we will move on to berries. But first I would like to answer some frequently asked questions.
Probably the most popular question from people who have heard the ringing but don't know where it is. These are generally different things. Forex is an international interbank currency exchange, it has nothing to do with the stock market, shares are not traded there. It is important here that scammers who offer to “invest in Forex” use ignorance of the difference between the currency and stock markets. Forex is "scam". The stock market is not a “scam” . Just remember that. To explain why this is so is the material for a whole separate article. As a rule, forex is much better advertised than stock trading, beware of it.
What is a bond and why can't I invest in one?
Bond - electronic promissory note public company, characterized by a certain yield and maturity. You you can buy bonds, but do so no need. Bonds are intended for investments of large capital. As a rule, one bond is very expensive, it can cost 2 million rubles, against several hundred rubles for one lot of shares. Yield may be bank deposit or below. Therefore, it makes no sense to buy bonds for individuals in most cases.
How much is one share worth on average?
Exchange prices change every business day. The initial nominal price per share and the number of shares for each public company were established many years ago. Some shares are worth literally a penny, the most expensive - a preferred share of Transneft - costs 125,000 rubles today. A few years ago, the Moscow Exchange set the price of one lot of shares at the level of 1,000 rubles, but since then some securities have fallen in price, so the minimum lot has fallen to several hundred rubles.
What is a preferred share?
If the company has a profit, such a security guarantees the payment of dividends (a simplified definition, there are exceptions), while for ordinary shares a joint-stock company may not appoint a dividend payment. The share of preferred shares in the authorized capital of a public company cannot exceed 25%. Holders of such shares cannot vote with them at the general meeting of shareholders.
What is an ordinary share?
Gives the right to vote and dividends if the dividends are recommended by the board of directors and accepted at the general meeting. Common stock, despite the wording “a security that gives the right to a part of the property and profits of the company”, does NOT give you the right to come to the enterprise and take something from it in exchange for a share or direct workers there, because you are a minority shareholder.
Who is a minority shareholder?
A shareholder who does not have the right to direct management of the company. Its opposite is the majoritarian.
Who is the majority shareholder?
The owner of a controlling stake (50% + one share or more). Can convene general meeting shareholders, the value of which is formal - any decision will be made by an obvious majority of votes. Therefore, the majority shareholder manages the company directly.
What are dividends?
Payment of a part of the company's profit to shareholders based on the results of the reporting period (quarter or year).
How to receive dividends if I bought shares?
You do not need to do anything, the depository will credit them to your account automatically according to the agreement that you will sign with the broker.
Who can become a shareholder in Russia according to the law?
Any capable adult. It is enough to buy shares or receive them by inheritance, as a gift or in other ways. Are you 18? If yes, then you can become a shareholder of Gazprom and other companies.
How many different shares are there on the Moscow Exchange?
In total, as of May 2015, 246 types of ordinary shares and 65 preferred different issuers were registered.
What is an issuer?
A company that issues shares (or other securities) into circulation.
What does it look like to buy shares at home through a computer?
One glance at the trading terminal can discourage all desire to invest This is one of the popular trading terminals— Transac. Buying and selling stocks is not as difficult as it seems when you look at the picture. But more on that in the next post. In the second part, we plan to talk about the procedure for choosing a broker listed on the stock exchange Russian issuers and the process of connecting an individual to trading on the stock exchange. Keep for updates.
Instruction
The stock market began its history in the XVII-XVIII century. Its formation was due to growing public spending for military purposes and the urgent need to attract borrowed funds to replenish the budget. That is why bonds became the first securities. The first stock exchanges appeared in the countries Western Europe.
Today, the volume of the global stock market exceeds $50 trillion. The list of the most developed countries in terms of the volume of trading in securities - the United States, Asia-Pacific countries and Europe.
The key purpose of the stock market is to redistribute free funds in favor of the most promising sectors of the economy. Companies and states use the stock market as a way to raise funds for the development of the company.
Some investors have managed to make huge fortunes in the stock market. The most striking example is W. Buffett. How do you make money in the stock market? It all depends on what securities are in the hands of the investor. If we are talking about shares, then they provide an opportunity to make a profit in the form of dividends, or from the difference between the purchase / sale price. The value of shares may rise under the influence of favorable market conditions and the successful development of the company. Bonds offer a fixed income. The advantage of investing in securities over other types of investment is the opportunity to receive unlimited returns, which can be many times greater than the profit from deposits. Moreover, this method of investment refers to.
The stock market has its own structure. It includes investors, brokers and supervisory authorities. The purchase of shares is carried out through special intermediaries - brokers. Three models of the stock market have been formed in the world. This is the Anglo-American model, where non-banking institutions act as brokers; German - here banks are brokers and a mixed model, where banks and non-bank organizations can be brokers.
Trading in the stock market is carried out on exchanges. The largest stock exchanges are New York, London, Tokyo Exchange. In Russia, the MICEX-RTS exchange is the leader.
The stock market can be classified in various ways. From the point of view of securities, there are markets for shares, bonds and derivative financial instruments (for example, futures contracts). Issuers distinguish between the securities market of companies or government securities. By types of transactions, a cash (or spot), forward market, etc. can be distinguished. The stock market can also be divided according to industry and territorial characteristics. Such a variety of investment instruments allows you to apply a variety of trading strategies and diversify your investment portfolio.
STOCKS AND BODS MARKET
08.09.2008
Topic 1: The concept of the securities market and its types.
Plan:
1. the essence of the securities market and its types.
2. functions of the securities market.
3. place of the securities market in the financial world.
one!!! AT general view The securities market can be defined as a set economic relations regarding the issue and circulation of securities between its participants.
The market of securities is a market that mediates credit relations, as well as financial relations with the help of securities. The basis of the securities market is the commodity market, money and money capital. The emergence and development of the securities market is associated with an increase in the need to attract financial resources, in connection with the expansion of production and trading activities. The appearance of a security as an instrument for raising financial resources allows the investor to a certain extent solve the problem of the risk associated with economic activity by means of acquiring such a quantity of securities that corresponds to the stability of his financial position. The presence of the securities market makes it possible to expand the financing of scientific and technological progress of the society.
The classification of the types of securities markets has much in common with the classifications of the types of securities themselves:
1) international national
2) national and territorial
3) markets for specific types of securities
4) markets for government and corporate (non-government) securities
5) markets for primary (basic) and derivative securities
According to the organizational structure, there are primary and secondary. The primary securities market is the market in which the initial placement of a security takes place. Any security is sold for the first time only in the primary market. As a result of the sale of securities in the primary market, the person who issued them receives the necessary financial resources, and the papers go to the first holders. The first and subsequent resales of securities take place in the secondary market. The secondary market no longer accumulates new financial resources dividends, and there is only a redistribution of resources among subsequent investors (depositors). The secondary market is a resale mechanism.
In the structure of the secondary market, exchange and over-the-counter securities markets are distinguished. stock market represented by the circulation of securities on stock exchanges. Historically, the over-the-counter market arose in the beginning. The subsequent growth of transactions with securities required the organization of a more orderly trade. As a result, stock and electronic exchanges appeared. A stock exchange can be defined as an organized securities market. Electronic exchanges are a computer network to which the terminals of companies - members of the exchange are connected. In accordance with the two market segments, spot and futures exchanges can be distinguished. Spot (cash) securities markets - a market for cash transactions. In the spot market, there is a simultaneous payment and delivery of securities, but the maximum transaction period should not exceed two days. In addition to the cash market for securities, there is also a derivatives market - this is a market in which urgent transactions are concluded, which are an agreement between counterparties on the future delivery of the subject of the contract on the terms that are negotiated at the time of the conclusion of such a transaction (from 2 days to 3 months). By internal organization exchanges are:
- commodity exchanges
- currency exchanges
- stock exchanges
According to the nature of issuers, the stock market can be divided into the market of government and non-government securities. The movement of funds between all the listed capital investment markets occurs depending on the following factors:
1) the level of profitability of the market
2) market tax conditions
3) the level of risk of capital loss or shortfall in expected income
4) organization of the market and convenience for the investor, the ability to quickly enter and exit the market.
5) Level of market awareness
2!!! Functions of the securities market.
Wound of valuable...
