Under the market we understand the totality of participants, the technology and tools, which are the goods, financial liabilities share in the business (shares)and their derivatives (contracts for future delivery). Unlike, for example, "the markets", the ultimate goal of the market is not so much the redistribution of goods, but also to establish free and fair prices and redistribution of risks. Shares market, moreover, is intended to provide a flow of cash into the more efficient industry. The main requirements for the instruments is their uniformity, the mass and the possibility of standardization. Obviously, goods for this purpose the most suitable raw materials and foodstuffs, of shares representing the company with capitalization of financial liabilities - primarily government. Note that even the markets with the largest turnover are not always markets in our understanding. For example, despite the high sales volume (in monetary terms)of the market of rough diamonds do not exist, because arbitrarily high monopoly price is in conflict with fundamental market principle.
Professional participants provide public access to market infrastructure, being the cornerstone of the industry. Not surprisingly, all the countries to them increased requirements, as failure to comply with the rules of professional ethics, uncleanliness or insolvency not only pose a threat to financial losses for clients, but also undermine the credibility of the free market system as a whole. Legislation of the countries which had the sad experience of bubbles and the subsequent market crashes (USA, France) differs tight regulation of professional activity in the markets, and the legislation of the United Kingdom, for example, classifies many questions to the competence of non-governmental associations. Simplistic (and note that quite conditionally professional participants can be classified as follows
Brokers are intermediaries, concluding the transaction on behalf of clients for the Commission, expressed in a fixed amount or a percentage of the transaction amount. The last option is distributed on the market of shares and bonds (securities, rather than futures) and in metal trade on the London stock Exchange (LME). It should be noted that in recent years, an increasing number of stock brokers move on fixed fees. In the conventional view, the broker may not have his own position, so theoretically financially stable (does not risk capital, covering operating costs by the Commission). Amounts due to customers, as a rule, are placed in the Bank on a separate (сегрегированном) account, the right to dispose of broker limited. However, brokers, particularly providing clients with the right to trade with a minimum margin (trick in the competition) may incur significant losses in case of adverse market movements and financial insolvency of one or more clients, risking money remaining.
the Dealers we'll call those who commit transactions, providing wishing to bilateral quotation (bid/ask, bid/offer, demand/supply), i.e. the price at which he is ready to buy or sell a certain tool. Income dealer is the difference between purchase price and sale, and the normal behavior of the dealer is to, as a broker, not to have his own position. Task dealer - provide market liquidity, he is obliged to deal at the quoted price. It is clear that in an active market time between purchase and sale, and hence the risk to remain open position, smaller, smaller, and the difference between the bid and offer. The dealers can be attributed to the so-called floor traders persons holding place on the commodity exchange and engaged in transactions for its own account. Floor traders, representing major brokerage houses, quote bid/offer to smooth out imbalances between coming from the clients ' orders for purchase and sale, i.e. "make the market". Natural persons having or renting exchange place and risking their own money, often referred to by locals ("local"). Locals are not required to provide bilateral quotations, although they do it, but usually open short positions against peaks and downs during the session, smoothing thus arising from price fluctuations. Another variety dealers are the so-called experts on the stock exchanges. As a rule, a large financial institutions with large blocks of shares, which they specialize. Reserves shares are used to extinguish the surge in demand, in case of growth of supply of specialist buys surplus, thus helping to avoid sharp fluctuations in stock prices. Specialists, thus, play a huge role in maintaining not only liquidity but also the stability of the market. In the currency market dealers or market-makers (making the market) are banks or financial companies. Since the main volume of deals on FOREX trading is speculative, declare themselves to be the dealer of any interested party may, if permitted by the legislation of the country of registration. The so-called "kitchen дилинги" - the company, arising from the simple premise that a client will sooner or later (rather sooner) to lose all your money, especially common in the former Soviet Union. Such companies are dealers in our understanding, it is rather a variety of casinos.
• stock Exchanges, clearing houses, depositories
Exchange have no direct effect on market prices, however, are invaluable for the market, providing the speed, efficiency and transparency of settlements on deals. Public Under the public we will understand all professionals who provide their services, those who make (or lose) money depending on movements in market prices, as well as those who can do it, because the very existence of such a possibility exerts pressure on participants of the market, and, therefore, the dynamics of prices. In the literature is also used term investor. In the broad sense of the investor is one who has an open position on any market, who risks means in order to gain profit. Businessmen (Commercials) - to classify futures traders, whose real business is connected with the production or use in everyday activities of the relevant raw materials, financial instruments. The investment Bank is recognized trader on the futures market indices and bonds, chocolate factory in the market of sugar, cocoa and milk powder. It is implied that the businessmen operate in the markets for purposes other than making a speculative profit, and with the purpose of hedging the risk of adverse changes in business conditions. So, the farmer can sell the future harvest, and McDonalds buy beef for the year ahead. For businessmen there are favorable conditions: low margin and lack of limits on open positions. As a rule, a large players in their markets, well-Orient in conditions, so it would be strange to shun speculation, allowing to earn extra dollar in addition to its main business. They do not shun...
Speculators - those who are not interested in the tool itself, and are only interested in the dynamics of prices. Speculator takes the risk hedger, hoping for a reward in the form of profit from a favorable change in prices in the future. To exclude the possibility of manipulating prices, the Commodity Futures Trading Commission futures trading USA) sets markets limits on open positions per participant, as well as reporting level - the amount of the open position, after which a client, the broker is obliged to inform the Commission. This customer to qualify as a large operator, however, without any frightening consequences - just for the statistics. On the unregulated market, such as the foreign exchange (FOREX), banks set limits (credit lines) for each other independently. Advisors are standing alone in this group of participants. In the United States CTA (Commodity Trading Advisors) are required to be licensed by the CFTC, there are many people and companies around the world offering free or paid for his vision of different markets - foreign exchange, stock, futures and forecasts for the future. Tracking in real time their recommendations (as a rule, serious analysts provide statistics and provide a free trial period), you can determine whether to spend the money. Question reasonably arises from the beginner in the market: If they're so smart, why themselves do not make millions, but sell for a penny invaluable ideas? Studies show that even the best CTA, showing theoretical results, measured three-digit numbers per cent per annum, most of the clients lose money, although receive these are the best recommendation. Why? Yes because Noses.
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