Securities Market and Stock Market

Published:3 October 2017 Updated:4 January 2024

It should be understood that both of these definitions are definitely not the same. The securities market is standardly referred to as the whole variety of relations, which are connected with the circulation, etc. Its peculiarity is in the variety of operations, which take place not only in the exchange, but also in the over-the-counter sector. Stock market The main feature of this market is that all activities take place in a strictly organized form.

“Primary” and “secondary” securities market

Absolutely all securities are initially traded on the primary market. By selling these assets, the person who issued them receives the finances he needs in exchange, and the papers falling into new hands can be sold or be in personal use. This is the secondary market, it provides further circulation of assets.

Securities market

Instruments of trading on the stock market

A security is an important document, necessarily drawn up in the prescribed form and having requisites, which communicates property rights. Typically, the following securities (instruments) are traded on the market:

  • Shares, providing the right to receive income, participation in the management of the organization, its property share;
  • Bonds, provide the right to receive capital at a specific time in the amount of the value of the document, as well as a portion of the interest thereon;
  • Certificates of deposit indicate the existence of deposits;
  • Promissory notes, acting as an obligation to pay a specific amount of money within a specific time frame;
  • Checks certifying a written order for the bank to pay a specific person an amount of money;
  • Mortgages, provide the right to receive capital or property.

Derivatives, derivatives of securities. Derivatives include the following types:

  • Futures (give an obligation to buy or sell),
  • Options (buy and sell),
  • Swaps (give the right to exchange assets).

Securities market

Securities market regulation

Regulation of the securities market – measures aimed at streamlining the activities of participants in the process (investors, speculators, issuers, etc.) and operations by special organizations and regulations. This is a necessary measure that not only ensures the clarity of the work and its safety, but also affects further the liquidity of the market, which depends on a smoothly functioning system. Types of regulation of the securities market:

  • with the help of the state (state authorities),
  • with the help of professional market participants,
  • society.

Why regulation of the securities market is necessary:

1) to maintain order in the marketplace,
2) to protect the market from unscrupulous individuals and organizations,
3) to support the open natural process of asset pricing,
4) to create a market interested in the development of entrepreneurship.

An important part of regulation, which I would like to talk about in more detail, is the one that takes place with the help of the state, maintains the financial security of the country, ensures the interests of society and those who work in the market. Among the areas of such regulation we would like to mention:

  • Regulatory, i.e. the creation of a set of documents, rules.
  • Creation of a separate body for state regulation of the market (it is the Federal Commission for the Securities Market, to learn about its responsibilities you can, for example, in the Law on the RTS, etc.).
  • Issuance of a license, etc.

Trading on the securities market: how to trade?

Being a part of the impressive securities market, the stock exchange will be successful for a beginning trader only if he works with it in a balanced and clear manner. Having decided to earn on the stock market, it is necessary to prepare for trading: choose assets, decide on a broker, install the trading terminal and start working.

How can I trade in the stock market today?

There are three ways to trade:

  • The standard way, with a phone call, which existed before.
  • Trust management, which allows you to trade with the help of an investment company with successful experience on the stock exchange.
  • Online trading is the most common, with the help of a trading terminal (quik, mt4, etc.), which is provided for the trader to work. Allows to work at any time of the day, track the history of orders, make any number of transactions.

If you remember, before, all trading was done in offices, over the phone. Today, thanks to the Internet, everything is much easier and you determine your own portfolio of assets, study the peculiarities of the market and invest from the comfort of your home. Also among the advantages of trading online are unlimited hours, any allowed number of assets, automatic application processing, protection of your data, the opportunity to increase your income.

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