The price dynamics of such securities has a high degree of uncertainty. It is better not to use the equities with low liquidity in your trading. The large number of equities is traded on the stock market all of them differ primarily by their liquidity. The increase of the position occurs at the beginning of the day, at the end of the day the massive exit from the market occurs that can provoke the growth of volatility. It is related to the work cycles of the market participants. At the lunchtime the activity of the trading is reduced. The start time of the trading and its ending are strictly defined.Trade session usually has several phases, active trading is often observed in the first few hours after the market opening and before its closing. Trade session is directly connected with geographical location of the exchange on which the selected securities are traded. The trading is accessible only in the trade session. Let’s consider the features of the trading by different instruments. The market where the buy/sell trades are held to the derivatives of financial instruments, such as Options, Swaps and Futures are performed. The market where the securities (equities, bonds, etc.) are traded.ĭerivatives market. The market where the buy/sell trades are held to different currencies. For example, metals, utilities and agricultural commodities.Ĭurrency market. This is the market where the corresponding commodities or groups of commodities are traded.
The markets can be divided by type of the traded assets on markets of commodities, currencies, securities and derivatives.Ĭommodity market. The derivatives market can be both exchange and OTC. In this case, the terms of delivery are negotiated by the contract between buyer and seller. The derivatives market implies the trading of contracts on the delivery of the assets in the future. The spot market is characterized by immediate payment and delivery of the traded asset. The markets can be divided by type of made trades on spot and derivatives markets. But due to the decentralization, the OTC market is not as transparent as the exchange market, for example, to receive the exact information about trade volumes by instrument of interest is almost impossible. OTC market doesn't have a centralized structure, but often it is organized not worse than exchange market.
In this case, the prices for the same asset are not required to be the same for all customers. Herewith, trades can be made both with clients of the dealers as well as with other dealers. They are quoting trading instruments, defining the prices to buy and to sell the assets. Trading on the OTC market is performed with the help of dealer network who act as organizers of the trading. All trades on securities or other assets that are held not on the centralized exchange are referred to the OTC market. The exchange collects and publishes data about made trades that gives an opportunity to assess the dynamics of trading interest to a particular asset. The exchange contracts which parameters are strictly regulated by the specifications are subject of the trading. Trading on the exchange is performed in the strict correspondence with developed regulations and rules. The exchange regulates the prices of assets, monitors the execution of obligations by trading participants, and resolves possible disputes. The markets can be divided by type of organization the trading on exchange and OTC (over-the-counter) markets.Įxchange market is organized centrally on the base of legal entity - the exchange. Of course, the organized market is more preferred, as it has the specialized supervisory authorities over the legality of the market activity and the probability of fraud is very low. The market can be organized (when the turnover of securities is performed by the established regulations and laws with the help of licensed intermediaries) or unorganized (when the relationship between the buyer and seller is regulated only by their personal agreements). Under the trading instruments we’ll further understand the different types of securities, currencies and derivatives. In today’s article I would like to give a classification of the most popular trading instruments and to consider the trading characteristics of each of them. In such a huge variety of opportunities it is hard for beginner to make a choice in favor of some trading instrument or instrument group. Brokers offer for each individual trader the possibility to check their own strengths to trade by hundreds of assets. Moreover, the presence of the computer is also not a necessary condition in some cases it is sufficient to have a smartphone. With the development of informational technologies, Internet trading has become available to everyone who has a computer and internet connection. World markets in Protrader Hey there, Protraders!
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