Stock market or securities market (English stock market, English equity market)- one of the main parts of the financial market on which turnover occurs. Securities include stocks, bonds, bills, checks, investment units, futures and options.

The stock market is a mechanism that ensures the transfer of funds from one sector of the economy to another.

What is the stock market for?

The stock market has many uses. It is used by different people with completely different goals and interests. In total, there are 3 main groups of applications:

• Business

Entrepreneurs often use the stock exchange to conduct business more efficiently. So, this is where large companies sell their shares and bonds; if desired, a businessman can buy an option or enter into one, thereby minimizing his risks from sudden fluctuations in various goods. All these securities will be discussed in more detail below.

• Investments

The most traditional participants in the stock market are investors. They purchase securities that entrepreneurs sell in order to make money from it. The investor sets himself the goal of investing money profitably and making a profit in the future. As a rule, he makes a long-term investment and does not expect too much profit. It is a rare investor who can boast of an income of more than 50% of their invested funds in a month. Of course, this only applies to investors on the stock exchange; other methods can bring greater income, of course, with greater risks.

• Speculation

Currently, the vast majority of participants on the stock exchange are speculators. They strive to buy a certain asset cheaper and sell it more expensive, thereby making money on the dynamics. Unlike investors, speculators are not interested in payments on securities (dividends, interest); their interest is in the dynamics of the exchange rate. In this case, a speculator can earn significantly more than an investor, but at the same time he faces an increased risk. To make money, he needs to correctly predict where the exchange rate will move in the future, then invest in the corresponding asset and try to make money on it.

Who is a participant in the stock market?

Participants in the stock market are:

• Issuers – those who issue (produce) securities on the market;
• Investors are buyers of securities;
• Professional market participants are individuals and companies for whom trading in the stock market is a professional activity (dealers, brokers, traders, etc.).

What types of stock markets are there?

Stock markets have many different classifications: by the nature of the placement of securities, by the form of organization (exchange, over-the-counter), by types of securities, by territorial basis, by types of transactions, etc.

Depending on the nature of the placement of securities, there are:

• primary stock markets, which deal only with the placement of new securities;
• secondary – engaged in the placement of securities that have already been in circulation; the third and fourth markets.

Closely related to the concept of the secondary stock market is the concept stock exchange, because it is on it that investors speculate. Stock Exchange is an organization whose object of activity is to ensure the normal and legally correct circulation of securities, as well as determining their market value.

Stock markets can also be divided into several types according to some other criteria:

• by issuers - the government securities market, the securities market of private companies, etc.
• by territorial basis - international market, national market, regional market;
• by types of securities offered and purchased - the market for shares, bonds, futures and other derivative securities, etc.;
• according to the exchange criterion – exchange and over-the-counter markets;
• by term - the market for short-term, medium-term, long-term and perpetual securities;
• by industry and some other parameters.

What are stock market indices?

A stock market index is a tool that gives an idea of ​​the general state of prices in the stock market, in other words, it shows where the market as a whole is heading.

A stock market index is calculated based on a certain number of stocks - different indexes may have a different number of constituent securities, some are based on 10 securities, and some on 500 or more. And different indices of the same market make it possible to evaluate it from different angles.

A huge number of shares are traded on world exchanges, but in order to understand how the stock market of a foreign country was generally traded, they use just the corresponding stock index, which shows the average value of the movement of a large number of shares traded on a given exchange (instead of to view the trading results for each individual security).

Is there a stock market in Russia?

On the Russian scene, the Russian Trading System (RTS) is also a key player.

On the MICEX they mainly trade shares, and on the RTS mainly in futures and options.

How is the Russian stock market regulated?

The basic document establishing the foundations of legislation on securities is the Civil Code of the Russian Federation, which defines the concept of securities, their types, requirements for them, subjects of rights secured by securities, the general procedure for the transfer and exercise of rights under securities, features of fixing rights arising from uncertificated securities and their circulation.

The main special act defining the structure and regulating the stock market is the Federal Law “On the Securities Market”. This Federal Law regulates the relations arising during the issue and circulation of issue-grade securities, regardless of the type of issuer, as well as the features of the creation and activities of professional participants in the securities market.

How to trade in the stock market?

The most important link in the stock market is the trade organizer, thanks to whom the purchase and sale of securities actually takes place. Usually the organizer of trading is the stock exchange. As a rule, stock exchanges do not require premises: shares are now traded electronically.

Private investors do not have direct access to the stock market. Trading is carried out through a professional participant in the securities market - a broker.

Candidates of Economic Sciences M. SAFRONCHUK and I. STRELETS.

A unique world where the concept of “speculation” has not a negative, but a very positive connotation is the securities market. Stocks and bonds, banks and stock exchanges, exchange rates and financial crashes - they are increasingly entering and influencing our lives. Even without playing on the stock exchange, many Russians have recently become holders of securities. The magazine has repeatedly written about these new financial realities (see "Science and Life" No. 9, 11, 1994, No. 2, 1995). We are turning to this topic again precisely because the number of people involved in the securities market is constantly growing. And among them there are many who find it difficult to understand economic wisdom on their own and even with the help of special literature. This article is devoted to the basics of the securities market mechanism and the features of our domestic market.

Trading room of the Russian Exchange.

Yield on government short-term bonds (GKOs) in July 1998.

What do economists call a market? Of course, not a market square on a sunny day or a supermarket. The concept of a market is abstract and not linked to a specific location. This is the interaction of supply and demand for goods and services, as a result of which their market price is formed. However, for economists the concept of “goods” has a broader meaning. The object of supply and demand can be not only industrial, consumer goods and services, but also the money supply (then we are talking about the money market), capital (capital market) and its element - securities.

The securities market is a huge and in many ways unique economic empire. The goods here are not passed from hand to hand; they cannot be touched. The purchase and sale of, say, a block of shares can be carried out many times during the day, but will not be accompanied by the physical movement of real objects. The product lives only on paper and the transfer from the seller to the buyer is carried out through accounting, that is, re-recording - something like mutual offset.

Exchange

Many people remember (especially thanks to foreign films) stories of fantastic enrichments that occur on the stock exchange. And it’s very interesting to look here, and even better - to take part in the stock exchange game.

But it was not there! “Who are you, gentlemen? Ordinary citizens or small legal entities?” they will meet you at the entrance. “Sorry, but you are not on the exchange list.”

To gain access to the stock exchange and put your shares into circulation, you need to be a very large, stable corporation with an impeccable reputation. Shares of second-rate companies are not allowed for quotation (purchase and sale). There is the concept of listing - a list of securities of those companies whose financial position has been verified by stock exchange experts.

Each exchange has its own listing criteria, but they are all very serious and not easy to meet. For example, on the New York Stock Exchange (NYSE - New York Stock Exchange), the easiest requirement would be to pay an entry fee of $29,350. Then you need to make payments from each share, as well as annually pay commissions to the exchange administration in the amount of up to 50-60 thousand dollars. And here are other requirements: attract at least two thousand investors who would agree to buy 100 or more shares from your company each, issue 1 million shares, the holders of which will be ordinary shareholders, and not the company. Moreover, over the past two years, you must achieve a profit of $7 million per year or more, and the value of the company’s property must be at least $18 million.

Such high requirements involuntarily raise the question: is it possible to do without an exchange? Can the company sell its shares elsewhere? Certainly. This is why there is over-the-counter trading, where securities are also bought and sold.

Does this have anything to do with the black market?

Not at all. The modern over-the-counter market is an extensive network of large and reputable commercial banks, investment companies and funds, united by a single computer system and electronic communications. However, in order to obtain the right to issue (issue) securities, you must become a fairly large company.

Let's say you organized a corporation or industrial group. You are respected and taken into account. But at the investment bank you should go to, you will first be introduced to a list of requirements for established clients. You cannot do without this bank: it is the investment bank that serves as the place for the initial placement of shares and bonds. And you will have to unquestioningly agree with all his demands.

They will send a lawyer who will sift through all the contracts, patents, licenses, and even get to the statutory documents - it must be accepted. An auditor will arrive and begin to reconcile your financial statements - nothing can be done. Information about all types of activities of the company and its results will be required - this must be provided.

Based on comprehensive information contained in a huge number of documents, the investment bank makes a conclusion about the competence of the company’s management, the financial position of the company itself and its partners, determines the competitiveness of the company, its development prospects and the industry as a whole. The investment bank has the right to be so meticulous, since it is the bank that takes on the risks associated with the further placement of the securities it has acquired among other banks, funds, and companies.

What are securities? These are documents confirming the right of its owners to receive expected future income under certain conditions. Among the variety of types of securities, stocks and bonds have become the most common and popular. When making a decision on the issue (issue) of securities, the corporation selects those types that will best solve the assigned problems. And, accordingly, acquires certain rights and obligations. Let's look at them in relation to stocks and bonds, and also talk about issuers (entities issuing securities) and investors (entities buying securities).

Promotion

This is a document certifying the contribution of a share (share) to the capital of a joint-stock company. It gives the right to receive part of the profit of the joint-stock company in the form of a so-called dividend.

The first joint-stock companies arose at the beginning of the 17th century: the East India Company in England (1600), the East India Company in Holland (1602). Currently, in developed countries, the joint-stock form of enterprises is the leading one, and therefore shares have long become an integral attribute of the modern securities market.

We have already talked about how many complex problems need to be solved in order to become an issuer. Becoming an investor is much easier: just buy a share of a joint stock company that interests you. But the investor does not have the right to demand that the joint stock company return the amount paid for the shares. The only way to receive money is to sell the share to another entity or individual on the secondary securities market.

There are various promotions. According to the nature of the order, they are divided into registered and bearer shares. All rights under registered shares can only be exercised by a specifically designated person. For example, if your name is written on the form, then no one else can receive dividends - only you.

If we are talking about bearer shares, then the person who presented them has the rights to these shares. Today, the bulk of shares are bearer shares.

Shares are also divided into ordinary and preferred. An ordinary share gives the right to participate in a meeting of shareholders. Owners of preferred shares do not participate in voting at shareholder meetings, but have certain privileges regarding dividends (fixed amounts, priority right to receive). Owners of ordinary shares receive dividends depending on the profit of the joint stock company. It turns out that privileges in the area of ​​dividends are, as it were, exchanged for rights in the area of ​​control. Most shares that corporations issue are classified as common stock.

When we buy securities, then, first of all, we are interested in their profitability and market price, that is, the stock price. But isn’t the share price indicated on it, isn’t that what the face value of the share says? The fact is that the denomination is a convention. It only matters when the stock is initially offered on the primary market, and the investor's share is exactly equal to the par value. However, as we already know, the investor cannot demand his share back; he can only resell the share. But at what price it depends on the current stock price.

The stock price depends on supply and demand, which are determined by many reasons. Since the exchange rate is not determined in advance, there is the possibility of speculation in the securities market. Those market participants who expect an increase in the price will buy shares, hoping to resell them at a higher price in the future. Players who want to increase the price are called “bulls”. Those who expect the price to fall will sell shares. They play to reduce the exchange rate, and in exchange practice they are called “bears”. (For more details, see "Science and Life" No. 9, 1991) Who will be in an advantageous position - the future will show. The stock price is subject to frequent fluctuations, and in the stock exchange game the principle is implemented: today it’s you, and tomorrow it’s me.

A striking historical example of short-selling, which made it possible to amass a fortune of 50-60 million pounds sterling, is associated with the name of Nathan Rothschild. During the Battle of Waterloo in 1815, he spread a false rumor on the London Stock Exchange that England had been defeated, and her government securities began to sell off like crazy. Rothschild himself hastily bought up the depreciated “papers” at a symbolic price. However, the official announcement of the victory did not take long to arrive. The price of securities increased sharply, and... the insidious plan was brilliantly realized.

Bond

Historically, bonds arose earlier than shares: even on the eve of the Peloponnesian War (5th century BC), the Athenian state issued a loan in the amount of 10 thousand talents. A bond is a security that gives the right to receive guaranteed income.

Unlike a stock, a bond does not provide voting rights when making decisions at shareholder meetings. The paid income is strictly fixed and does not depend on changes in the issuer's profit.

Bonds are term papers, meaning their value is repaid over time. They are released for different periods, but we can say that these periods tend to become shorter and shorter. In the heyday of the classical type of bonds in Europe, they were issued for an incredible term according to our today's ideas: 100-150 years and at an incredible interest rate according to today's ideas: 1.5-2% per year. At that time, they were considered a model of reliability: once you invested in a bond, you could easily earn coupons for a number of years. The bond was printed with a special sheet of coupons, the number of which was equal to the number of interest payments during the period until the bond was redeemed. Thus, by taking a pair of scissors and cutting off the coupon, the bond owner was asserting his right to the bond's income. This is where the expression “coupon clipping” comes from.

Currently, the terms for which bonds are issued have been significantly reduced. The main reason is inflation, which depreciates the value of money invested in a bond. There are short-term, medium-term and long-term bonds. According to Russian legislation, short-term bonds can be issued for a period of up to 1 year, medium-term - up to 5 years, long-term - up to 30 years.

Bonds are issued by private and government issuers. It is believed that the state cannot go bankrupt, therefore government bonds are the standard of reliability. (This is in theory. More on Russian realities below.) But the lower the risk, the less reason there is to pay a high return on a security. The general rule for the functioning of the securities market is: the higher the profitability, the lower the reliability, and vice versa.

In Russia, short-term government bonds (GKOs) are the most widely used in the financial market.

A bond is a debt obligation of the issuer. The buyer of the bond provides a loan to the issuer. Therefore, when purchasing bonds from a joint stock company, we do not become co-owners of this company, as when purchasing shares, but its creditors.

Choosing securities

The Russian securities market is still in its formation stage. This is explained simply: the securities market is a reflection of the state of the real market for goods and services.

Russian investors remain very cautious when making decisions about purchasing stocks and bonds, which is understandable given the negative experience associated with instability and inflationary trends in our economy. Issuers of securities on the domestic market also often behave quite constrained.

Among joint stock companies in our country, closed joint stock companies predominate: they do not issue their shares to the market, but distribute them within the company, in contrast to open joint stock companies, whose securities are freely sold and bought on the secondary securities market.

Government bonds are considered the most reliable today. Among them are GKOs, OFZs (federal loan bonds), OGSS (state savings loan bonds).

World experience says that government securities are almost risk-free (minimal risk), but their yield is also low. In Russia, at a certain period, an opposite and therefore unique situation developed: GKOs were both reliable securities and highly profitable - 30% per annum on GKOs and 10% per annum on deposits in Sberbank. The reasons for this phenomenon lie in the field of politics, but this is a topic for another discussion. Let us only note that one thing with the other - economics and politics - is closely connected. National securities markets of different countries also influence each other. Thus, the global financial crisis of late 1997 had an adverse impact on the Russian market.

At the beginning of this year, OFZs and foreign currency bonds of the Ministry of Finance were considered more promising. According to experts, the situation in this market is in favor of six-month bonds: compared to one-year and three-year bonds, they have little risk, and price fluctuations over this period allow for greater returns.

Experts believe that over the past year the municipal bond market has noticeably “matured,” that is, become more civilized. These are primarily bonds of St. Petersburg, Moscow and Orenburg, which are also considered very reliable.

In the second half of last year, so-called “rural” bonds were issued (traditional debt registration, in this case - agricultural producers to the Ministry of Finance for a loan for 1996). There are still few of these bonds, which may hinder the growth of their liquidity (that is, convertibility, mobility), despite the expected prospects of these securities. We emphasize the expected.

Shares remain the riskiest investments on the Russian market. But even in this most speculative segment of the market, there have been glimpses of improvement: the degree of liquidity of shares has increased and their riskiness has decreased somewhat. Not the least role in this was played by Russia’s entry into the Paris and London clubs of creditors, which attracts foreign investors to the domestic market.

So, when choosing securities that you want to purchase on the Russian market, you should focus, first of all, not only on profitability indicators, but also on the degree of reliability of the issuer and the level of liquidity of a given security. A list of the most reliable banks and companies, indicators of profitability and liquidity of government and private securities, as well as analytical reviews are systematically published in such economic journals as "Money" and "Securities Market". Here you can always see the rating of consulting firms, explaining, in particular, which securities to buy, which to sell, which ones are best to hold on to for now, and other issues that concern investors. Detailed information and recommendations from professionals greatly facilitate the difficult decision-making process in the securities market for both experienced and potential investors.

(The ending follows.)

Details for the curious

ABOUT THE YIELD OF STOCKS AND BONDS

When making forecasts regarding changes in the stock price, you can, to some extent, focus on the dividend paid on the shares of a given joint-stock company. The dividend rate is an indicator of the stock's profitability; it represents the ratio of the dividend size to the market price of the stock. However, the profitability of a stock depends not only on the size of the dividend, since low dividends can be paid during the period of growth of the company, when large investments are made. Therefore, despite low dividends, the stock price can rise significantly. Every time you make a decision to buy or sell a stock, you need to take into account all this variety of factors.

We’ll talk about bond yields in a little more detail, since they are the most popular in Russia today. If the par value of a stock does not matter when buying or selling it on the secondary market (a stock is a perpetual security), then in relation to a bond it is fundamentally important to take into account the par value and maturity date. The fact is that the regular fixed income on a bond over a period of time is a percentage of its face value stated on the bond. This also applies to coupon bonds. Let's say the par value of the bond is 1000 rubles, the maturity date is 10 years, the annual coupon income is 100 rubles. Therefore, the coupon yield is 10 percent.

However, there are also zero-coupon bonds, such as state bonds, which are sold at a price below par. How, in this case, can one determine their annual profitability? You can use the short-term bond yield formula:

(R 1 - R 2): R 2 x 365: t,

Where R 1 - price at par, R 2 - sale price, 365 - number of days in a year, t- bond term until maturity (number of days). Suppose a bond is issued for a period of 3 months (90 days) with a par value of 100 rubles. and is sold at a price below face value - for 95 rubles.

Substituting the data into the formula, we get a yield equal to 0.2, or 20% per annum.

- This is the sphere of economic relations related to the issue and circulation of securities. Its goal is to accumulate financial resources and ensure the possibility of their redistribution by carrying out various transactions with securities by market participants, i.e. in the implementation of intermediation in the movement of temporarily free funds from investors to issuers of securities.

Classification of securities markets

There are various classification characteristics of the securities market.

By territorial principle The securities market is divided into international, regional, national and local.

From time and method of receipt of securities into circulation:

• primary;
• secondary.

Primary - This is a market that serves the issue (issue) and initial placement of securities.

Secondary - This is a market where previously issued securities are circulated, purchases and sales or other forms of transfer of a security from one owner to another are carried out during the entire life of the security. Here, in the process of buying and selling an asset, its actual exchange rate is determined, i.e. the price of securities is quoted.

Types of securities markets depending on on the degree of organization:

• organized;
• disorganized.

Organized market - This is the circulation of securities on the basis of legally established rules between licensed professional intermediaries.

Unorganized market - this is the circulation of securities without observing rules that are uniform for all; this is a market where the rules for concluding transactions, requirements for securities, for participants, etc. are not established, trade is carried out arbitrarily, in private contact between the seller and the buyer. There is no system for disseminating information about completed transactions.

Types of securities markets depending on from the place of trade:

• stock exchange;
• OTC.

Exchange market - This is a market organized by a stock (futures, stock sections of currency and commodity) exchange and brokerage (brokerage) and dealer firms operating on it.

Over-the-counter market - the sphere of circulation of securities not admitted to quotation on stock exchanges. The over-the-counter market deals with the circulation of securities of those joint-stock companies that do not have a sufficient number of shares or income to register (list) their shares on any exchange and be admitted to trading on it. It can be organized or unorganized. The organized over-the-counter market is formed by stock shops, bank branches, as well as dealers, which may or may not be members of the exchange, investment companies, investment funds, bank branches, etc.

By types of transactions The securities market is divided into cash and futures.

Cash market(cash market, spot market) is a market with immediate execution of transactions within 1-2 business days, not counting the day the transaction is concluded.

Derivatives market(forward) is a market in which transactions of various types are concluded with a execution period exceeding two business days.

By way of trade The following types of securities markets are distinguished:

• traditional;
• computerized.

Trade on computerized market is conducted through computer networks that unite the relevant stock intermediaries. The characteristic features of this market are:

• the lack of a physical place where sellers and buyers meet, and therefore direct contact between them;
• full automation of the trading process and its maintenance; The role of market participants is reduced mainly to entering their orders for the purchase and sale of securities into the trading system.

Trade on traditional market carried out directly on the exchange itself between sellers and buyers of securities.

By issuers and investors The securities market is divided into markets: government securities, municipal securities, corporate securities, securities issued (purchased) by individuals.

By specific types of securities There are bonds, bills, etc.

In addition, the securities market is divided according to industry, territorial and other criteria.

And further cooperation between companies and them.

1. What is the stock market in simple words

Stock market(from the English "stock market") is an open securities market where anyone can sell and buy assets (sometimes it is also called the financial market or stock exchange). Abbreviated as FR.

Initially, the purpose of the stock exchange was to attract capital to developing companies. A long time ago, many began to be called joint-stock companies. Through the sale of part of their company, they formed the authorized capital.

Online trading allows you to quickly find out the current assessment of the real value of a business. Over time, for many it became just speculation, for some a means to distribute assets, and for others a quick way to become a co-owner of a company (shareholder).

In the stock market, large investors reallocate their assets. This can be called a convenient tool that allows you to quickly and with minimal commissions manage your capital and assets. For example, today we keep money in dollars, tomorrow we transferred it to blue chips, and at the end of the month we purchased bonds. All these actions are done by clicking the buy/sell buttons on one brokerage account.

• bonds
• goods
• bills

However, most often ordinary investors use two main categories: stocks and bonds, as the most liquid and accessible instrument for trading and investment.

The stock market is a direct reflection of the current situation of the country's economy, shows its investment climate, and gives a forecast of future income. Steadily growing securities prices indicate favorable economic development in the country. Of course, this is not an axiom, but the relationship between the economy and market prices is almost linear.

Note 1

6.1. Choosing a broker

Individuals can only trade in the securities market through brokerage companies. This does not mean that he will manage your money. You just work through it (it is an intermediate link between the MICEX exchange and you).

There are many brokerage companies in the market. If someone thinks that a broker is a person who wants to take your money, then he is deeply mistaken. The only thing a broker earns from is commissions from the turnover of its clients. Therefore, it is beneficial for him that clients make many transactions rather than lose their money.

I have been working in the market since 2011. During this time I have already worked with several companies. I can recommend the following brokers for work:

In my opinion, these companies are the best in all respects. They provide services to more than half of all traders in Russia. The commission of these brokers is extremely small: 0.0373% of turnover (up to 1 million rubles). If the turnover is higher, then the commission will be even lower: 0.0295%, 0.0236%, 0.0177%, etc. Through these companies you can buy American stocks, currencies, bonds, commodities, etc. There are services for following the strategies of professionals and more.

Other brokers are less reliable and do not provide such professional support. Also, their commissions for trading turnover will be much higher. For example, a Sberbank broker charges 0.06% for trading turnover, which is 2 times higher than Finam! However, you do not receive any benefits by paying such a high commission. I would say that on the contrary, you get worse service for more money.

The broker registration form looks something like this:

To register, prepare a scan of your passport, INN, SNILS.

6.2. Opening an exchange account

After registering with a broker, you will be able to open an exchange account. To do this, in your broker’s personal account, click on the link “Open a new agreement”

Choose a brokerage account type

I recommend opening an IIS so that you can later receive a tax deduction. However, to obtain it, the IIS must be open for at least three years. You can top it up later, only the opening date is important. In any case, I recommend opening it for the future (it's free).

6.3. Refill

You can top up your brokerage account without commission. To do this, it is enough to make an interbank transfer using the relevant account details or bring cash to the bank.

I personally prefer to use a wire transfer via a Tinkoff debit card (card review"). You can top it up without commission from any other bank card, as well as make interbank transfers without commission. Very comfortably.

I would also like to note that after opening an IIS, it is not necessary to replenish it. You don't have to pay any commissions for it. Now many people open these accounts for the future for their relatives (wives, children, parents).

6.4. Execution of trading operations

The broker will provide you with access to trading terminals (these are programs for trading). For example, this is what the interface looks like when purchasing Sberbank shares (SBER) through the Finam Trade application (broker Finam)

The application also has a convenient opportunity to view the current trading schedule

You decide for yourself when and what to buy. For example, today you decide to buy bonds. After a couple of weeks, the stock exchange collapsed, in this case you can sell bonds (all or part) and buy shares. After some time, sell and buy currency. And all these operations can be performed remotely with minimal commissions.

7. Types of transactions in the stock market

There are two types of transactions on the stock exchange:

1. Long or "long position" (trading upward, "long"). The most popular type of deal. Allows you to buy securities for the long term without paying any commissions.
2. Short or “short position” (trading down, “short”). To do this, you need to sell securities that you do not have. The broker can lend them out. For debt you have to pay a small commission every day, so holding such a position for a long time is not profitable (of course, this is provided that the market does not collapse). For trading during the day, you can take shorts for free. The main thing is that we return the same number of securities that we borrowed.

There are the following types of orders in the stock market:

1. Limited order(buy limit, sell limit). This is a buy/sell order with a specific volume and price. As soon as the market price reaches it, the order is executed. This is the most profitable and predictable type of orders for a trader.
2. Market order(market order). Purchase at the current market price. In an illiquid market, it is fraught with a strong overpayment for the spread. In liquid markets, you can use it at the moment of breakouts of levels in order to have time to enter the movement.
3. Stop order(stop loss, take profit). You can specify a level upon reaching which shares will be automatically sold at the market price. If you specify a stop price of 100.00, then most likely the price will be lower: 99.92, etc. Because at the time of sudden movements in the market there will not be enough applications to satisfy all sales. This situation is called slippage. You can read about this type of orders: stop loss and take profit
4. Stop limited(stop buy, stop sell). Indication of the price after which the asset will be automatically purchased at the market price. For example, if the market is growing and breaks through an important level, then you can automatically buy at the breakout price.

An integral part of the financial market, the purpose is to transform savings into investments; This is a stock market that provides long-term needs for financial resources through the circulation of stocks, bonds, certificates of deposit, treasury bills and other similar documents.

A security is a financial document certifying the right of ownership or loan relationship, defining the relationship between the person who issued this document and its owner and providing for the payment of income in the form of interest or dividends, as well as the possibility of transferring monetary and other rights arising from this document, to other persons. Securities are issued by firms, banks, and the state, called issuers. The procedure for issuing securities is regulated by law.

The main features of securities are:

Profitability;

Reliability is the property of securities to avoid the possibility of losses.

Bonds are the most reliable, while ordinary shares are the least reliable. negotiability Securities perform functions: regulatory, control, information, the function of a mechanism connecting various spheres and sectors of the national economy, including the real economy and finance.

The securities market is divided into primary and secondary.

In the primary market, new securities are issued and securities are placed by the issuer at a nominal price, i.e., the price indicated on the security.

In the secondary market, previously issued securities are resold. Here their exchange rate (market) price is determined. This market consists of the stock exchange and the over-the-counter market.

Market structure

The stock market consists of the following components:

Market subjects;

Market (exchange and over-the-counter stock markets);

State regulatory and supervisory authorities (Federal Service for Financial Markets (FSFM), central bank, ministry of finance, etc.);

Self-regulatory organizations (associations of professional participants in the securities market that perform certain regulatory functions, for example, NASD (USA), etc.).

Market infrastructure

Legal;

Information (financial press, stock indicator systems, etc.);

Depository and settlement and clearing networks (there are often separate depository and clearing systems for government and private securities);

Registration network.

There are 3 models of the stock market depending on the banking or non-banking nature of financial intermediaries:

Non-bank model (USA) - non-bank securities companies act as intermediaries.

Banking model (Germany) - banks act as intermediaries.

Mixed model (Japan) - intermediaries are both banks and non-banking companies.

Economic role of the securities market:

1) with their help, there is a process of centralization of temporarily available funds and savings of owners to finance production and construction, their technical re-equipment, for the development of trade, transport, and the service sector.

2) Securities, acting as investment vehicles, are used not only to eliminate the shortage of capital investments and economically stimulate the activities of enterprises, but also to create financial conditions for the functioning of market infrastructure facilities: banks, exchanges, insurance companies, trading houses, etc.

With the help of securities issued by the state, the current budget deficit is covered, its cash execution is ensured, and unevenness in the receipt of tax payments is smoothed out. One of the functions of the Central Bank market is the flow of capital, which allows for the rapid inter-industry and inter-regional movement of capital with the aim of concentrating them in technically or economically advanced sectors of production.

The information function allows investors, through the situation on the securities market, to see and feel the state of the economic situation in the country, in accordance with it, orient and take prompt measures for the rational use of their capital.

The activity of the securities market can reduce the inflationary state of the economy by transferring part of consumer income to investment purposes, and thereby reducing their excess pressure on the consumer market; in general, in terms of reproduction, it contributes to the normalization of the proportions of consumption and accumulation.

To receive part of the JSC’s property upon its liquidation;

To receive information about the production and financial condition of the joint-stock company;

For preferential acquisition of new issues of shares.

The value of shares, as a rule, is not redeemed by the joint-stock company and can only be converted into money again through sale. The share circulates as long as the joint stock company exists; types of shares are ordinary and preferred shares. The dividend on ordinary shares fluctuates depending on the financial results of the JSC. Preferred shares give the right to receive a fixed percentage. First, the dividend is paid on preferred shares, and the remaining amount is distributed among other types of shares. The share can be bearer or registered. When transferring a registered share to another person, it is required to put a special transfer signature on it, which is done with the knowledge of the meeting of shareholders.

The shareholder form of ownership allows you not to withdraw funds from the enterprise if any shareholder-co-owner suddenly wishes to return the money. In this case, its shares will be sold on the secondary market, and the real capital of the enterprise will not be affected, and the production process itself will not be disrupted.

A share gives the right to participate in the management of the joint-stock company; such a right is actually concentrated in the hands of only those investors who own a controlling stake. Only they receive ownership of real assets. For the remaining shareholders who own a small number of shares, their acquisition represents only a simple loan transaction; their share of shares in practice does not give them the opportunity to effectively influence decisions made in the joint-stock company. Such shareholders may grant their voting rights to shares by proxy, for example, to the board of directors of the joint-stock company.

Bonds give their owner the right to receive a fixed income annually, but do not provide voting rights when making management decisions. A bond is issued (issued) for a limited period of time, for example 3.6 and 12 months. Its cost is fully repaid after this period. Bonds can be issued by the state, cities, enterprises, various funds, etc. Bond yields are commonly referred to as "coupon" payments because the bondholder, at set intervals, cuts the coupon off the bond and mails it to the entity that issued the bond to collect the interest due.

Bonds are issued registered and to bearer. Convertible bonds are also issued. Such securities give the right to exchange them for shares of the same company. A classic bond is a security with a fixed interest rate. However, in practice, more flexible varieties of this paper have appeared. Bonds with “floating” interest appeared. Income on them fluctuates depending on the situation on the loan capital market.

There are zero coupon bonds. No interest is paid on them. The investor receives income due to the fact that the bonds are sold at a price below par upon issue, and when the maturity date arrives, they are repaid at par.

A certificate of deposit is a financial document issued by lending institutions. It is the institution's certificate of deposit of funds, certifying the depositor's right to receive the deposit. There are different certificates of deposit on demand and time ones, which indicate the period for withdrawal of the deposit and the amount of interest due. Certificates of deposit are widely accepted by investors, various companies and institutions.

A savings certificate is a written obligation to deposit funds by an individual in a credit institution, certifying the depositor's right to receive the deposit and interest on it. There are savings certificates, registered and bearer.

A check is a monetary document of an established form containing an unconditional order from the drawer to a credit institution to pay its holder the amount specified in the check. As a rule, the payer of a check is a bank or other credit institution that has such right. A promissory note is an unsecured promise by a debtor corporation to pay a debt and interest on it when due. This type of securities is in last place among the company's debt obligations. Government securities are government debt obligations. They differ in issue dates, repayment periods, and interest rates.

Currently, in most countries there are several types of government securities in circulation. The first is treasury bills. Their repayment period is usually 91 days. The second is treasury bonds with a maturity of up to 10 years. The third is Treasury bonds with maturities ranging from 10 to 30 years. These types of securities are issued to finance government debt: short-, medium- and long-term. Accordingly, interest payments on them also differ.