Concept and tasks of the financial market

Topic 4. Financial market. Stock market.

1. Concept, objectives and segments of the financial market

2. Financial market segments

3. Financial markets in Russia

4. The essence of the securities market (stock market)

5. Functions of the securities market

In economics, subjects' need for financial resources and their availability do not coincide. Therefore, a mechanism for redistributing temporarily free financial resources is needed.

Financial market is a market where financial resources are formed and used.

Financial market is a market for financial assets.

The financial market is the starting point that is necessary for an enterprise to receive fixed capital in the form of profit (financial resources) and distribute it.

The main features of a developed financial market are the stable development of the regulatory framework, information security of operations and market participants, a fairly large circle of participants and high-tech infrastructure. The presence of these signs ensures the quick and effective attraction of financial market funds for your needs.

The financial market solves the following problems:

1)providing issuers with the opportunity to mobilize internal sources of financing and temporarily free monetary resources for long-term investments and meet other needs;

2) the distribution of capital between its participants, contributes to the concentration of financial resources in the most profitable areas of the economy;

3) providing investors (legal entities and individuals) with the opportunity to form their investment portfolio in the best possible way: to save capital from inflation and receive additional income.

A modern market economy cannot be imagined without highly developed financial markets. Representatives of all sectors of the national economy, households, non-profit organizations, government bodies, and the non-financial sector participate in operations on the financial market. The result of transactions in financial markets is the formation of effective intersectoral financial flows or capital flows.

The main operations in financial markets are operations with financial instruments: securities, deposits, loan capital, foreign currency, etc.

The financial market consists of the following segments:

1) capital market, which is divided into the loan capital market and the equity securities market. Equity securities are certificates that confirm the owner's right to own property. There are property relations here. Long-term financial instruments are traded on the loan capital market, provided on terms of urgency, repayment, and payment. They include the market for long-term bank loans and the market for debt securities, also long-term. This is where credit relations take place;

2) securities market (stock market);

3) insurance market, on which life, property, etc. insurance is carried out. ;

4) currency market is a market in which goods are objects that have currency value. These include: foreign currency, securities and other debt obligations denominated in foreign currencies, precious metals and natural gems. The subjects (participants) are banks, exchanges, financial and investment institutions, and government organizations. The object of the foreign exchange market is any financial requirement indicated in currency values;

5) gold market- this is the sphere of economic relations associated with the purchase and sale of gold, both for the purpose of accumulating and replenishing the country’s gold reserves, and for organizing business or industrial consumption;

6) money market plays a special role in the monetary regulation of the economy, and its importance is achieved in ensuring a uniform flow of money into the economy. Divided into discount market(purchase and sale of bills), interbank loan market, in which commercial banks lend to each other, the Eurocurrency market, trading in short-term financial instruments denominated in Eurocurrency, the market for certificates of deposit (large time deposits in banks);

7) other segments.

The financial market in practice characterizes a wide system of individual types of financial markets with various segments. Each of these types and segments serves different clients, has certain obligations, and operates in different regions and areas of economic life. This market operates with a variety of financial tools, is serviced by specific financial institutions, has a fairly extensive financial infrastructure.

Financial market segmentation– the process of purposefully dividing its types into individual segments depending on the nature of the financial instruments that circulate on the market.

Based on this definition, financial market structure will look like this: credit market And money market, which may be presented as the loan capital market, securities market, foreign exchange market, precious metals and stones market, financial services market . Each of the identified financial market segments, in turn, can be divided into separate sectors (micro-segments) depending on the criterion underlying such division.

Each segment of the financial market has its own specific features and operating features, its own rules for concluding agreements with financial assets, etc. Moreover, the same asset can be a commodity in several markets. For example, dollar credit is subject to the activities of the money, credit and foreign exchange markets. Such the process of transferring financial resources from one type of financial market or segment to another called securitization.

There is great ramification and diversity of the financial market. This is due to the existence of different forms and methods of trading financial assets, as well as the existence of different types of financial assets. That's why there are a large number signs , by which you can classify the financial market (Fig. 14.1 ). The most common approaches to determining the structure of the financial market are as follows.

By type of financial assets

- credit market (the market for bank loans, loan capital), that is, a market in which the object of purchase and sale is free credit resources, the circulation of which is carried out on the terms of repayment, urgency, payment and security;

- stocks and bods market (stock market), in which the object of purchase and sale are all types of securities (stock instruments) issued by enterprises, the state, and various financial institutions;

- currency market, in which the object of purchase and sale is foreign currency and financial instruments servicing transactions with it;

- market for gold and other precious metals (silver, platinum, etc.), in which the object of purchase and sale are precious metals;

- financial services market as a set of various forms of mobilization and movement of funds of financial resources from free circulation into areas of investment application (rental operations, insurance, etc.).

Depending on the period of circulation of financial assets The financial market is divided into:

- money market , where purchase and sale transactions of market instruments and financial services of all financial markets discussed above are carried out with a circulation period of up to one year;

- capital market , where purchase and sale transactions of market financial instruments and financial services with a circulation period of more than one year are carried out.

According to organizational forms of functioning The financial market is divided into the following types:

1. Organized (exchange) market , which is represented by a system of stock and currency exchanges. It provides:

Concentration of supply and demand in one place;

Checking the financial position of issuers of the main types of securities admitted to trading;

The bidding procedure is open;

The fulfillment of concluded agreements is guaranteed.

Fig.1.1. Financial market classification

2. Unorganized (over-the-counter) market , on which the purchase and sale of financial instruments and services are carried out, agreements for which are not registered. This market is characterized by:

Higher level of financial risk compared to the organized market. This is due to the lack of verification procedures on exchanges for many financial instruments and services that are listed on this market;

Insufficient level of legal protection for buyers;

Low level of current consumer awareness;

Trading in inferior quality securities.

By regional basis The financial market is divided into:

- local financial market , which is represented mainly by the transactions of commercial banks, insurance companies, unorganized securities traders with local business entities and the population;

- regional financial market , which operates within the region (republic) and together with local unorganized markets, includes a system of regional stock and currency exchanges;

- national financial market, which includes the entire system of financial markets of the state, regardless of their types and organizational forms;

- global financial market as an integral part of the global financial system, which integrates the national financial markets of states with open economies

By speed of agreement implementation The financial market is divided into:

- market with immediate (urgent) implementation of agreements (spot market), in which agreements are carried out in a short period of time (usually up to three days);

- market with the implementation of agreements in the future (forward markets: futures, options, forwards and swaps market). Derivative securities - currency, commodity and stock derivatives - rotate in this market.

According to the terms of circulation of financial instruments The financial market is divided into:

- primary market , which characterizes the market for primary and secondary issues of securities, in which their initial placement is carried out;

- secondary market , on which apply securities sold on the primary market.

All components of the financial market are closely interconnected.

• Main segments of the financial market (by type of assets in circulation):

• credit market - lending to borrowers is carried out;

• stocks and bods market - through transactions with securities, new capital is mobilized in the primary market and trading in existing assets is carried out in the secondary market;

• derivatives market - operations are carried out based on future differences in rates of securities, currencies, interest rates, etc.;

• currency market - conversion operations with foreign currency are carried out;

• insurance market - operations with insurance instruments are carried out.

Legal basis make up:

• Legal basis functioning of the financial market make up:

• Civil Code of the Russian Federation

• Federal Law “On the Securities Market”

• Federal Law “On Banks and Banking Activities”

• Federal Law “On the organization of insurance business in the Russian Federation”

• Federal Law “On Investment Funds”

• Federal Law “On Non-State Pension Funds”

Regulators

• Regulators activities of financial market institutions:

• 1. Federal Service for Financial Markets (FSFM)

• 2. Bank of Russia (regulation and supervision of the activities of credit institutions)

• 3. Federal Insurance Supervision Service (supervision over the activities of insurance organizations)

Credit market

• Credit market

• (loan capital market) -

• segment of the financial market in which transactions are carried out purchase and sale of credit resources on terms of payment, urgency and repayment

Stocks and bods market

• Stocks and bods market is a set of relations that arise during the issue and circulation of securities.

• An integral part of the financial market in which the redistribution of funds occurs using financial instruments such as securities.

Security –

• Security –

• a document of the established form and details certifying property rights, the exercise or transfer of which is possible only upon presentation (Article 142 of the Civil Code of the Russian Federation)

By economic content security -

• By economic content security -

• a special form of existence of monetary, commodity or other type of capital, which can be alienated and independently circulate on the market as a commodity and also generate income for its owner

Structure of the securities market

• Structure of the securities market

1. Depending on circulation stage securities are distinguished:

• 1. Depending on circulation stage securities are distinguished:

• Primary market - issue of a security into circulation. Result all procedures ensuring the issuance of a security - its acquisition first owner.

• Secondary market - the market in which they are traded previously issued securities. This is a set of any transactions with these securities, as a result of which there is a permanent transfer of ownership rights to them from one owner to another.

2. Depending on the level of adjustability securities markets are:

• 2. Depending on the level of adjustability securities markets are:

• Organized market - circulation of securities according to firmly established rules regulating almost all aspects of market activity.

• An unorganized market is a market participants whom negotiate independently on all issues of transactions concluded on it at your own “peril and risk”.

3. Depending on way of organizing trade :

• 3. Depending on way of organizing trade :

• Exchange market - securities trading organized on stock exchanges.

• OTC market - trading in securities without the intermediation of stock exchanges.

4. Depending on type of trade

• 4. Depending on type of trade The securities market exists in two main forms:

• Public market- a traditional form of trading in which sellers and buyers of securities directly meet in a certain place, and public, transparent trading takes place (in the case of exchange trading) or closed trading (negotiations) are conducted, which for some reason are not subject to wide publicity.

• Computerized (electronic) market- various forms of securities trading based on the use of computer networks and modern communications.

5. Depending on the timing

• 5. Depending on the timing for which transactions with securities are concluded:

• Cash market(spot market, cash market) - a market for immediate execution of concluded transactions, while purely technically it can last for up to 1-3 days if delivery of the security itself in physical form is required.

• Derivatives market is a market with delayed execution of a transaction, usually by several weeks or months. Futures contracts for securities are mainly concluded in the derivatives market.

Securities market participants

• Securities market participants- legal entities and individuals engaged in activities related to trading in securities

• They can be grouped into five main groups:

• - issuers,

• - investors,

• - stock intermediaries,

• organization of infrastructure,

• organization of regulation and control.

Securities market participants :

• Securities market participants :

• 1. Issuers - release securities are in circulation and bear obligations on them to their owners.

• 2. Investors - legal entities and individuals who invest their free capital or savings in securities ( buyers valuable papers).

3. Stock intermediaries- traders providing connection

• 3. Stock intermediaries- traders providing connection between issuers and investors, sellers and buyers of securities and having state licenses for the relevant intermediary activities.

• Intermediary activities include: brokerage activities, dealer activities, securities management activities.

Stock intermediaries:

• Stock intermediaries:

• Brokers at the expense of the client in accordance with agency or commission agreements. Their income comes from commissions.

• Dealers- carry out transactions with securities at your own expense, and their income is the difference between the prices of sales of securities to one client and the prices of purchases of the same securities from other clients.

• Management companies- carry out activities related to trust management of securities and/or funds released from the sale of securities or intended for their acquisition, on behalf of and in the interests of their clients.

4. Infrastructure organizations

• 4. Infrastructure organizations- organizations serving the activities of issuers, investors and stock intermediaries in the securities market (stock exchanges, settlement centers, registrars, depositories)

• 5. Regulatory and control organizations- organizations aimed at regulating the securities market and monitoring the activities of all its participants on it.

• Purpose state regulation - ensuring trust investors to the securities market.

securities include the following kinds:

• According to the Civil Code of the Russian Federation, the main securities include the following kinds:

1. Bond nominal value And recorded in it percent

• 1. Bond - “an issue-grade security that secures the right of its holder to receive a bond from the issuer within the period specified by it nominal value And recorded in it percent from this cost or property equivalent"

Government bond And just a bond state, but just a bond - any entity

• Government bond And just a bond- the same type of security with the only difference being that a government bond can only be issued state, but just a bond - any entity

2. Promotion rights its owner (shareholder) on receiving part of the profit dividends

• 2. Promotion- an issue-grade security securing rights its owner (shareholder) on receiving part of the profit joint stock company in the form dividends, for participation in the management of the joint-stock company and for part of the property remaining after its liquidation

3. Bill of exchange

• 3. Bill of exchange- a security document certifying a written monetary debtor's obligation to repay a debt, the form and circulation of which are regulated by special legislation - bill law

4. Check pay money

• 4. Check- a security document certifying a written order from the drawer to the bank pay to the recipient of the check the amount indicated in it money during its validity period. A check is a type of bill of exchange that is issued only by a bank.

5. Bank certificate certificate of cash deposit

• 5. Bank certificate- a security that is a freely tradable certificate of cash deposit in a bank with the latter’s obligation to return this deposit and interest on it after a specified period in the future

6. Mortgage

• 6. Mortgage- a registered security certifying the rights of its owner in accordance with a mortgage agreement (real estate pledge) to receive a monetary obligation or the property specified in it

7.

• 7. Derivative financial instruments (derivative) are financial instruments, the prices or conditions of which are based on the corresponding parameters of another financial instrument - the base one.

• Typically, the purpose of purchasing a derivative is not to obtain the underlying asset, but to hedge (insure) price or currency risk over time, as well as to obtain speculative profit from changes in the price of a derivative (futures, option, etc.).

Currency market

• Currency market- a set of financial centers where purchases and sales of foreign currencies are made in national currency at the rate established on the basis of supply and demand

• Classification of foreign exchange markets:

• 1. By area of ​​distribution

• International(FOREX) is a global market where regional and domestic foreign exchange markets interact and transactions are carried out with currencies that are widely used in international payment transactions.

• Regional- territorial market in which countries within a given territory came to an agreement on the operation of uniform rules of the foreign exchange market (currently the Asian, European, and American regional markets are distinguished).

• National(or internal) currency market organized on the territory individual country.

• 2. In relation to foreign exchange restrictions

• Free- the market in which none currency restrictions. Currency restrictions, as a rule, mean a system of government measures to establish rules of behavior in the foreign exchange market.

• Unfree- market with currency restrictions

3. By type of exchange rates

• 3. By type of exchange rates

• With one exchange rate regime- foreign exchange market with free exchange rates, i.e. With floating rates, the quotation of which is established at exchange trading.

• With dual mode- market with simultaneous use fixed And floating exchange rates.

• 4. By degree of organization

• Exchange- a market in which foreign exchange transactions are carried out through a foreign exchange exchange.

• OTC organized by dealers who may or may not be members of the foreign exchange exchange. Dealers organize buyers and sellers through various means of communication.

• Classification of foreign exchange markets

Features of the foreign exchange market:

• Features of the foreign exchange market:

• does not have a specific venue;

• works around the clock;

• there is no external regulatory body;

• has the largest number of participants and the largest volume of transactions;

• the fastest and most liquid market.

Product in the foreign exchange market - National currency

• Product in the foreign exchange market - National currency or a set of currencies (currency basket)

Foreign exchange market participants :

• Foreign exchange market participants :

• 1. Commercial banks . Conduct the bulk of foreign exchange transactions. Other market participants hold accounts in banks and carry out the necessary conversion transactions with them.

2. .

• 2. Enterprises engaged in foreign trade operations. Companies that participate in international trade ensure a strong demand for foreign currency (importers) and a constant supply of foreign currency (exporters).

3. Central banks.

• 3. Central banks. They manage foreign exchange reserves, conduct foreign exchange interventions that affect the level of the exchange rate, and also regulate the level of interest rates from investments in the national currency.

4. Currency exchanges.

4. Currency exchanges. The work of currency exchanges, unlike stock exchanges, does not take place in any particular house or at a fixed time. Thanks to the development of telecommunications technologies, most of the world's leading financial institutions use the services of exchanges directly and through intermediaries around the clock. The world's largest exchanges are the London, New York and Tokyo Currency Exchanges.

5. Investment funds

• 5. Investment funds (international investment, pension, mutual funds, insurance companies and trusts).

6. Brokerage companies.

• 6. Brokerage companies. They are responsible for carrying out the conversion transaction between the buyer and seller of foreign currency. For their intermediation, brokerage firms charge a brokerage commission.

7. Private individuals.

• 7. Private individuals. Individuals carry out a wide range of non-trading transactions in the field of overseas tourism, remitting wages, pensions, royalties, purchases and sales of foreign currency. It is also one of the largest groups that carries out foreign exchange transactions for speculative purposes.

• The development of the foreign exchange market and foreign exchange transactions in Russia began in the late 80s.

• Starting from 1992, the ruble exchange rate began to be set according to the ratio based on Moscow International Currency Exchange (MICEX) .

• CJSC MICEX is the main platform in Russia for currency trading. The Bank of Russia uses the MICEX exchange rate to set official ruble exchange rates to foreign currencies. The exchange trades in dollars, euros, Ukrainian hryvnia, Kazakh tenge, and Belarusian rubles.

• In order to imagine the scale of the functioning of the foreign exchange market, it can be noted that the annual volume of world trade in physical goods is equal to the turnover of the foreign exchange market for several days.

Insurance market

• Insurance market – the sphere of formation of supply and demand for insurance products.

The insurance market expresses relationship between different insurance organizations

• The insurance market expresses relationship between different insurance organizations(insurers) offering relevant products, as well as legal entities and individuals in need of insurance protection.

Insurance product:

• Insurance product:

• relates to a specific insurance object (what is insured)

• determines the reasons for insurance (insurance risk)

• its cost (sum insured, extent of insurer's liability)

• price (insurance rate)

• conditions of cash payments (settlements) in anticipation of those events against which the latter is insured.

Certificate(certificate) insurance services policy.

• Certificate(certificate) insurance services serves as a document called insurance policy.

• The policy confirms the fact of the concluded insurance contract (purchase and sale of an insurance product), which is always substantive, addressed to the insurance participants, contains the main quantitative parameters of the transaction, and is a legal document.

Specifics contribution Always less insurance amounts.

• Specifics insurance product is that the insurance contribution Always less insurance amounts.

attractiveness

• This ratio provides market attractiveness insurance products and the corresponding demand for them.

• There is a visible benefit from purchasing an insurance product. But it does not mean a loss for the seller, since the number of policies (buyers) is usually greater than the number of insured events.

Page 1 financial market segments

Currently, the following main segments of the financial market can be distinguished:

first, the securities market (stock market), where new capital is mobilized (primary market) and trading of existing assets is carried out (secondary market). This market is served by two important segments of the financial market: the money market and the capital market. At the same time, the securities market includes part of the international money markets and capital markets, as well as the world's stock exchanges;

the money market is the next segment of the financial market, where highly liquid financial instruments are traded and the movement of short-term loans (up to one year) is ensured;

the capital market, where highly liquid debt assets with a maturity of more than one year are also traded;

managed money markets, where professional portfolio investment management is carried out;

foreign exchange market, where conversion transactions with foreign currency are carried out;

a derivatives market for futures and options, where these derivatives are used for the purposes of hedging or speculation on future differences in prices of securities, currencies, interest rates, etc.

The financial market segments listed above are mainly strictly organized markets, in the sense that their activities are strictly regulated by the government and other regulatory authorities, and direct access to them is limited (they are intended only for professionals). Typically, investors and borrowers access such markets through intermediaries.

Page 2. stock market

Currently, in the economic literature there are two main approaches to the content of this category. The first identifies them: the stock market is a financial institution in which they trade a special type of product - securities. At the same time, the interpretation of the securities market is defined as the sphere of economic relations associated with the issue and circulation of securities.

Analyzing the content of the category “stock market”, one should consider the history of the emergence of the concept “stock”. Apparently, the term “stock market” comes from the French fonds or English funds, one of the meanings of which is “money capital”. In the 18th century in English the word stocks was used in this meaning. Hence, obviously, the concept of stock exchange (i.e., money capital exchange), which first appeared in England in 1773 (London Stock Exchange), which is usually translated as “stock exchange.” At the first stock exchanges, they traded mainly in bonds, i.e., money capital was expressed mainly in debt instruments and shares until the middle of the 19th century. Not much was produced in both England and the USA, not to mention other countries.

At the same time, there is a narrower interpretation of the content of the concept “stock market”, which consists in the fact that it primarily covers the stock market, i.e. is a market for securities, which are usually classified as stock (capital) values. As modern world practice shows, the stock market is understood, first of all, as the stock market.

Page 3. money market

The money market is usually called the market for deposits and short-term financial instruments. The money market is a segment of the financial market where highly liquid financial instruments are traded and the movement of short-term loans for up to one year is ensured (unlike the capital market). That is, this is the segment where you can get money for a short time and where it can be converted into loans for a longer period.

The terminology of the money market organically includes the foreign exchange market, but due to the special significance of the latter, it is usually separated into a separate segment of the financial market. The money market is analogous to the capital market for short-term operations. In fact, fixed income debt instruments are traded in this segment of the financial market.

In most cases, only a limited number of institutional participants are allowed into the money market, which nevertheless have a significant impact on the entire economic and financial system. The interest of most investors and companies in this segment of the financial market is determined by the simple opportunity to safely invest money and receive a fixed income at pre-agreed rates.

The main objective of the money market is to create favorable conditions for its participants to manage cash, as well as other short-term assets and liabilities for up to one year. One of the most common money market instruments are short-term deposits (loans).

Page 4 capital market

The capital market is a part of the financial market in which long-term investment instruments are traded. The presence of a capital market in a state is an integral sign that the economy is developing, and the more developed the market, the more developed the country’s economy.

Most often, the capital market refers to the market for bonds and other long-term fixed income financial instruments issued for a period of more than one year. While short-term fixed income securities with a maturity of up to one year are considered money market instruments.

The most important component of the capital market is the international capital market. In recent years, national borders have ceased to be a barrier to lenders and borrowers meeting in the market to buy or sell bonds. It is now possible for borrowers in one country to issue debt securities denominated in the currency of another country and sell them to investors in a third country. Such operations are common. carried out by financial institutions located in any fourth country, including one of the three main centers of international capital markets - New York, London, Tokyo.

Page 5 foreign exchange market

The foreign exchange market is the market where conversion transactions with foreign currencies are carried out. Often, divisions of this market do not have a physical address: in fact, it is simply a communications network. The existence of the foreign exchange market is due to the urgent need for various commercial firms and other organizations to buy goods abroad, to be able to directly invest capital abroad, to carry out speculative transactions in foreign financial markets (stock, futures, etc.).

Currently, it is generally accepted to divide the foreign exchange market into the following sectors:

retail market for spot trading (cash);

Forex market (interbank market for spot and forward trading);

wholesale market for spot, forward and swap trading;

market for trading futures and options.

Currency exchange theoretically and practically occurs in many financial centers of the world, so the foreign exchange market is not localized somewhere in one specific place. As in the markets discussed above, the exchange rate in this market is determined by supply and demand. The main players in the foreign exchange market are commercial banks, transnational corporations and state central banks. The world's largest banks trade among themselves on the foreign exchange market, in particular on Forex; they create this market. However, in practice, the volume of turnover in this segment of the financial market is close to speculative, which on the one hand is positive, since this ensures high liquidity of circulating assets, but on the other hand, it often leads to disruption of market stability.

The world's largest foreign exchange market is the Forex market (FOREX), where conversion operations are carried out, that is, transactions to exchange one national currency into another at a rate previously agreed upon by the two parties on a certain date (hence, in fact, the name of the market itself - Foreign Exchange Operations) .

By now, the Forex market has turned into a global market, united by a single communication network. It opens on Monday morning in New Zealand and closes on Friday evening in the US. 24-hour access to the foreign exchange markets of Asia, Europe and America allows you to open and close positions at the most favorable time and at the best price.

The various segments of the financial market discussed above are essentially a spot market, that is, a market for immediate delivery of the contracted asset. At the same time, the modern financial market also includes a derivatives market based on the principle of deferred delivery. It should be understood that only no more than 5% of futures contracts result in actual delivery of the underlying asset, and all other futures contracts act as ordinary financial instruments, which are also called derivative financial instruments.

The general globalization of the financial market and the unification of its components in recent years have led to the fact that the derivatives market has become an integral part of the international financial market. Underlying assets, be they stocks, bonds, interest rates, currencies, etc., are becoming increasingly interconnected (in price and behavior) with derivatives. In some markets, the turnover of futures contracts far exceeds the turnover of their underlying assets in the spot market.

The main instruments of the derivatives market are futures, forwards and options. A futures is an agreement between two parties to buy or sell an underlying asset in a certain quantity, at a certain date in the future, at a price fixed today. Futures contracts have standard expiration dates, called delivery dates.

The definition of futures also applies to a forward contract. Their main difference is that the forward contract is not standardized. It can be concluded for any quantity of the underlying asset and for any period. Its purpose is to carry out a real sale or purchase of the corresponding asset, including for hedging. Therefore, futures are traded on an exchange, while forwards have an exclusively over-the-counter market.

Options come in two types: call option and put option. In our literature, these types of options are often referred to by their English spelling - call options and put options.

A put option is a financial instrument that gives its owner the right to buy a certain amount of an underlying asset at a pre-agreed price within a specified period of time. From the above definition it is clear that the positions of the participants in an option transaction are unequal: the owner of a call option has the right to buy the underlying asset, but is not obliged to do so, and the seller of the option is obliged to sell the underlying asset in any case when the option is exercised by its owner. In this regard, in order to induce a potential option seller into an option transaction, the option buyer must pay him a certain amount of money, called the option premium.

A put option is a financial instrument that gives its owner the right to sell a certain amount of an underlying asset at a specified price within a specified period of time.

The concept and essence of the financial market, its formation in the Russian Federation

In conditions of market relations, the uninterrupted formation of financial resources, their most effective investment and targeted use are ensured with the help of the financial market.

The financial market is a system of market relations, which is the sphere of monetary transactions, where the object of the transaction is the free funds of the population, economic entities and government agencies, provided to users (borrowers) either against securities or in the form of loans. Therefore, it operates both as a securities market and a loan capital market. Its prerequisite is the discrepancy between the needs for financial resources of a particular entity and the availability of sources for satisfying them. Its functional purpose is to mediate the movement of funds from their initial investors (owners) to secondary investors (borrowers, users).

The modern structure of the financial market is characterized by two main features: temporary and institutional.

By temporary sign distinguish between the money market, where short-term loans are provided (up to one year), and the capital market, where medium-term (from 1 to 5 years) and long-term loans (from 5 years or more) are issued.

By institutional feature The modern financial market presupposes the existence of a market (the capital itself or the securities market) and a market for borrowed capital (the credit and banking system). In addition, the securities market (equity capital) is divided into the primary market, where issues of securities are sold and purchased, and the secondary (exchange) market, where previously issued securities are sold and purchased. There is also an over-the-counter (street) securities market, where securities are sold that, for one reason or another, cannot be sold on the exchange.

Both features of the financial market are characteristic of all developed countries, however, of course, the state of the national market is judged by the second (institutional) feature, especially by the presence and degree of development of its two main tiers: the credit and banking system and the securities market.

The level of development of national financial markets is determined by a number of factors, among which are: the economic development of the country; traditions of functioning of the credit market and securities market in the country; the level of production accumulation in the country; level of savings of the population.

In the Russian Federation, at the current stage of economic development, the financial market is represented mainly by two segments - the foreign exchange (dollar) market and the securities market. According to experts, they account for more than 90% of volumes.

It began to noticeably intensify after a significant weakening as a result of the financial and credit crisis of 1998.

the securities market, which accounted for up to 40% of volumes in the pre-crisis period.

The loan capital market (interbank loans) accounts for no more than 10% of the total volume, and short-term loans predominate.

Naturally, a significant restructuring of the credit and banking system is required in the direction of its activities with the real sector of the economy (as noted).

The securities market (equity capital) in the near future (according to experts’ forecasts) should undergo significant development, since its key task is to attract investments that determine the possibilities for long-term economic development. This segment of the financial market ensures the rapid flow of financial resources into various sectors of the economy. In addition, the securities market is one of the most important instruments of state budget policy.