Trading Part 2
Continued. Part 1 here
Exchange - a legal entity that ensures the regular functioning of an organized market for goods, currencies, securities and derivative financial instruments. (From wikipedia)
Around the world there are a huge number of exchanges, both with a very long history (several hundred years) and young, with a history of less than ten years. The functions of the exchanges include ensuring the maximum market mode of trading (demand at the best price or supply at the best price are satisfied first, if there is a response interest), registration of all transactions, ensuring the fulfillment of obligations by all counterparties to each other. Depending on the assets being traded (instruments), the exchange is divided into:
1. Stock exchanges - stock exchanges on which securities are traded (the most common securities are stocks and bonds, but besides them there are a huge number of other securities)
2. Derivative exchanges - exchanges on which derivatives are traded (futures, options, etc.)
3. Commodity exchanges - exchanges where goods are traded.
4. Currency exchanges - exchanges on which currencies of different countries circulate.
However, there have always been universal exchanges - exchanges that combine the organization of trading with different instruments within the same organizational structure (often in different sections).
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You can read about the exchange infrastructure before the computerization era about how it functioned (and continues to function, but less and less) (there is something to read, it’s very interesting, at least I think so). Now the trades are mostly held electronically using specialized programs. For any Internet user, it is available, without leaving home, to buy, say, a hundred Gazprom shares, or to enter into a futures contract for 100 barrels of BRENT oil, 100 tons of sugar or troy ounces of gold. Moreover, it is completely free to make deals several times a minute, or even a second.
Which exchanges are most accessible?
In Russia, there are two popular and most accessible to private traders of the exchange: MICEX (Moscow Interbank Currency Exchange) and RTS (Russian Trading System). Both exchanges are universal, and combine the organization of trade in basic and derivative stock, currency, and commodity instruments. For individuals on the MICEX is the most interesting section of the securities, on the RTS FORTS (futures and options on the RTS).
In addition to Russian exchanges, numerous international exchanges are also available for Russians. However, to participate in trading on a foreign exchange you will have to go through certain organizational difficulties associated with transferring money and communicating with a foreign broker (most likely not in Russian), or use the services of Russian brokers to enter foreign sites (many Russian brokers provide such services, but most likely it will cost more than working directly with a foreign broker)
Who is a broker and why is he needed?
The fact is that only a legal entity- licensed professional bidder can directly participate in trading on the stock exchange. Such participants either engage in stock exchange operations for their own purposes, or provide brokerage services, i.e. provide access to exchange trading for individuals and legal entities who are not prof. bidders, or combine both activities. In addition, the broker usually maintains back-office (accounting operations), provides daily reports to the client, performs the function of a tax agent (calculates, withholds and transfers income tax). For their services, the broker, like the stock exchange, charges a fee. Usually in proportion to the trade turnover of the trader. If you want to trade on the stock exchange as a private investor, then you need to choose a broker. Brokers are different in terms of the quantity and quality of services provided, the size of commissions, technical equipment and reliability, and other factors. Before choosing a broker it is worthwhile to weigh everything up well, read reviews on the Internet, ask those who worked with the broker, etc.
If such a day comes when you choose a broker and come to his office with the intention to trade on the stock exchange and money, most likely you will come back home with the software, and on the same day, or in the next few days, you will be able to make real transactions on the stock exchange . It is very possible that this day will significantly change something in your life. It is very possible that not for the better. :)
A few separate words I would like to say about forex.
Wikipedia definition:
Forex (Forex, sometimes FX, from English FOReign EXchange - currency exchange) - the market of interbank currency exchange at free prices (quotation is formed without restrictions or fixed values).
In other words, FOREX is a market where exchange rate differences are traded, or currency pairs. For example, the ratio of ruble to dollar, or RUR / USD, if you buy 1000 today at 30, sell tomorrow at 30.1, you get 100 dollars of profit. In the same way with other currency pairs EUR / USD, GPB / USD, etc. Since the dollar is the world's reserve currency (for the time being), currencies that are denominated in dollars are usually traded. But FOREX is not an exchange. This is an interbank market, each bank present in the foreign exchange market has its own quotes for buying and selling currencies. In this infrastructure, there are special agencies that track the best buying / selling rate among banks and broadcast this data in real time. The minimum lot for an interbank transaction is $ 1 million. Naturally, individuals cannot participate in such auctions. Meanwhile, in Russia there are a lot of organizations providing access to Forex for individuals. How does Forex work in Russia? Clients and their money are collected by an organization called the Dilling Center (DC). DC keeps records of each client’s funds. The DC provides real-time quotes for currency pairs to clients received from one of the agencies sending quotes, but makes its own adjustments to the value in connection with the DC's technology. Clients of DC deal with all transactions not on the exchange, but from the DC itself. DC deals with customers to buy and sell on their own quotes. If the amount of client money trading in one direction by more than 1 lot is accumulated - the DC makes a real deal on the interbank market, in other cases the clients of one DC trading against each other. By tradition, the commission on the Forex is not charged, but there is a spread (at the same time there are different quotes for buying and selling, you can buy more expensive, sell less), always different, determined by the DC itself, depending on the market situation and the position of the DC itself. This moment always causes a lot of customer disputes with DC. Quotes and spread depend on DC. DC may, and is interested in manipulating quotes against the interests of the client. Whether he does it or not, it is impossible to find out or prove it. But this is not the worst in Forex. Forex is not regulated by law in our country and Forex companies operate mainly under a bookmaker license. Forex disputes are not considered in the courts. Customer money and the companies that provide Forex services, as a rule, are located in offshore zones. I read about the numerous situations in which Forex companies simply appropriated clients' money for themselves under the most ridiculous pretexts. “We canceled your transaction because it was traded at a non-market quotation”, “We cannot repay you money, because the banks we worked with went bankrupt”, “We block your account without a refund, because you manipulated prices” or even “we will not refund your money, because you paid WebMoney, which is not real money. " On the Internet you can find many such stories about FOREX. Therefore, before contacting Forex a hundred times think about which company you will work with, think very well. And it is better not to enter the game at all by such rules. The Russian RTS Exchange provides an opportunity for individuals to freely participate in trading in futures for the euro against the dollar, for the ruble against the dollar, and the ruble against the euro. As far as I know, the exchange plans to increase the number of currency instruments. On this site, all transactions are made by real counterparties with each other and are fixed by the exchange. At least no one will take them.
Exchange - a legal entity that ensures the regular functioning of an organized market for goods, currencies, securities and derivative financial instruments. (From wikipedia)
Around the world there are a huge number of exchanges, both with a very long history (several hundred years) and young, with a history of less than ten years. The functions of the exchanges include ensuring the maximum market mode of trading (demand at the best price or supply at the best price are satisfied first, if there is a response interest), registration of all transactions, ensuring the fulfillment of obligations by all counterparties to each other. Depending on the assets being traded (instruments), the exchange is divided into:
1. Stock exchanges - stock exchanges on which securities are traded (the most common securities are stocks and bonds, but besides them there are a huge number of other securities)
2. Derivative exchanges - exchanges on which derivatives are traded (futures, options, etc.)
3. Commodity exchanges - exchanges where goods are traded.
4. Currency exchanges - exchanges on which currencies of different countries circulate.
However, there have always been universal exchanges - exchanges that combine the organization of trading with different instruments within the same organizational structure (often in different sections).
')
You can read about the exchange infrastructure before the computerization era about how it functioned (and continues to function, but less and less) (there is something to read, it’s very interesting, at least I think so). Now the trades are mostly held electronically using specialized programs. For any Internet user, it is available, without leaving home, to buy, say, a hundred Gazprom shares, or to enter into a futures contract for 100 barrels of BRENT oil, 100 tons of sugar or troy ounces of gold. Moreover, it is completely free to make deals several times a minute, or even a second.
Which exchanges are most accessible?
In Russia, there are two popular and most accessible to private traders of the exchange: MICEX (Moscow Interbank Currency Exchange) and RTS (Russian Trading System). Both exchanges are universal, and combine the organization of trade in basic and derivative stock, currency, and commodity instruments. For individuals on the MICEX is the most interesting section of the securities, on the RTS FORTS (futures and options on the RTS).
In addition to Russian exchanges, numerous international exchanges are also available for Russians. However, to participate in trading on a foreign exchange you will have to go through certain organizational difficulties associated with transferring money and communicating with a foreign broker (most likely not in Russian), or use the services of Russian brokers to enter foreign sites (many Russian brokers provide such services, but most likely it will cost more than working directly with a foreign broker)
Who is a broker and why is he needed?
The fact is that only a legal entity- licensed professional bidder can directly participate in trading on the stock exchange. Such participants either engage in stock exchange operations for their own purposes, or provide brokerage services, i.e. provide access to exchange trading for individuals and legal entities who are not prof. bidders, or combine both activities. In addition, the broker usually maintains back-office (accounting operations), provides daily reports to the client, performs the function of a tax agent (calculates, withholds and transfers income tax). For their services, the broker, like the stock exchange, charges a fee. Usually in proportion to the trade turnover of the trader. If you want to trade on the stock exchange as a private investor, then you need to choose a broker. Brokers are different in terms of the quantity and quality of services provided, the size of commissions, technical equipment and reliability, and other factors. Before choosing a broker it is worthwhile to weigh everything up well, read reviews on the Internet, ask those who worked with the broker, etc.
If such a day comes when you choose a broker and come to his office with the intention to trade on the stock exchange and money, most likely you will come back home with the software, and on the same day, or in the next few days, you will be able to make real transactions on the stock exchange . It is very possible that this day will significantly change something in your life. It is very possible that not for the better. :)
A few separate words I would like to say about forex.
Wikipedia definition:
Forex (Forex, sometimes FX, from English FOReign EXchange - currency exchange) - the market of interbank currency exchange at free prices (quotation is formed without restrictions or fixed values).
In other words, FOREX is a market where exchange rate differences are traded, or currency pairs. For example, the ratio of ruble to dollar, or RUR / USD, if you buy 1000 today at 30, sell tomorrow at 30.1, you get 100 dollars of profit. In the same way with other currency pairs EUR / USD, GPB / USD, etc. Since the dollar is the world's reserve currency (for the time being), currencies that are denominated in dollars are usually traded. But FOREX is not an exchange. This is an interbank market, each bank present in the foreign exchange market has its own quotes for buying and selling currencies. In this infrastructure, there are special agencies that track the best buying / selling rate among banks and broadcast this data in real time. The minimum lot for an interbank transaction is $ 1 million. Naturally, individuals cannot participate in such auctions. Meanwhile, in Russia there are a lot of organizations providing access to Forex for individuals. How does Forex work in Russia? Clients and their money are collected by an organization called the Dilling Center (DC). DC keeps records of each client’s funds. The DC provides real-time quotes for currency pairs to clients received from one of the agencies sending quotes, but makes its own adjustments to the value in connection with the DC's technology. Clients of DC deal with all transactions not on the exchange, but from the DC itself. DC deals with customers to buy and sell on their own quotes. If the amount of client money trading in one direction by more than 1 lot is accumulated - the DC makes a real deal on the interbank market, in other cases the clients of one DC trading against each other. By tradition, the commission on the Forex is not charged, but there is a spread (at the same time there are different quotes for buying and selling, you can buy more expensive, sell less), always different, determined by the DC itself, depending on the market situation and the position of the DC itself. This moment always causes a lot of customer disputes with DC. Quotes and spread depend on DC. DC may, and is interested in manipulating quotes against the interests of the client. Whether he does it or not, it is impossible to find out or prove it. But this is not the worst in Forex. Forex is not regulated by law in our country and Forex companies operate mainly under a bookmaker license. Forex disputes are not considered in the courts. Customer money and the companies that provide Forex services, as a rule, are located in offshore zones. I read about the numerous situations in which Forex companies simply appropriated clients' money for themselves under the most ridiculous pretexts. “We canceled your transaction because it was traded at a non-market quotation”, “We cannot repay you money, because the banks we worked with went bankrupt”, “We block your account without a refund, because you manipulated prices” or even “we will not refund your money, because you paid WebMoney, which is not real money. " On the Internet you can find many such stories about FOREX. Therefore, before contacting Forex a hundred times think about which company you will work with, think very well. And it is better not to enter the game at all by such rules. The Russian RTS Exchange provides an opportunity for individuals to freely participate in trading in futures for the euro against the dollar, for the ruble against the dollar, and the ruble against the euro. As far as I know, the exchange plans to increase the number of currency instruments. On this site, all transactions are made by real counterparties with each other and are fixed by the exchange. At least no one will take them.
Source: https://habr.com/ru/post/85373/
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