STOCK MARKET

The general data

The world goods and Stock Markets are of indubitable interest for stags. The operations with derivative financial instruments of goods and Stock Markets: futures and options found the propagation. The number of financial instruments is measured in hundreds. Such a wide choice permits flexibly change investment tactics when minimal risk. Dynamics of these markets is more inertial and conservative in comparison with money ones, but this doesn’t hamper to receive high profits.

The most popular are the futures contracts for: stock indexes, American Treasury obligations, wheat, coffee, oil products, cotton, metals etc. The character of transactions with futures contracts is the fact that when purchase or sale one doesn’t pay the total contract sum, but only a security making from 2 up to 5 per cent of value of the Contract. In so doing, investor also gets a chance to execute operations with the instrument from 1:50 to 1:20, in such a way considerably increasing speculator’s pecuniary potential.

These transactions give practically limitless opportunities for speculative trading and diversifications of portfolio. Besides, they are simply necessary with a view of insurance (hedging) price risks when striking export-import commercial bargains.

Attractiveness of international financial markets for investors is obvious. Stock and goods markets are characterized by lesser amplitude of price sudden changes than money-markets, but they are quite enough profitable ones. As the practice shows, when normal Stock Market speculation and average skills one may get quite a fair profit – up to 30 percent per month.

Principles of organization of Stock Market auction

Mechanism of trade

The mechanism of trade in the framework of general auction order is based on the principle: “Order driven market” — the market of inter-competing proposals when the transaction is struck automatically when intersection the conditions in counter proposals. Putting up of the proposals and striking the bargains takes place during a commercial day being divided into the following periods:

• pre-commercial period (the opening price is being determined);
• trade session;
• after trade period (the transactions are carried out on weighted average price determined within the last 30 minutes of commercial session).

The auction of large packages of securities (The Mode of negotiating transactions)

The mechanism of sale of large packages of securities is realized in parallel with general auction mode. In the framework of this mode the Participants come to the agreement with their counteragent by way of putting up of so-called <address> (addressed to a concrete Participant of the auction) and <address less> (put up without indicating the concrete Participant) proposals. In this mode the Participants may fix the term of fulfilling of transaction since current commercial day till 30 days after striking the bargain.

This mode of auction permits:

• to strike the bargains “without cover”, that’s without enough sums of money or amount of securities with future increasing of reserves;

• neither limit the package of securities by amount of standard lot, nor be afraid of “dissipation” of a large package.