What is the securities market?
Securities market (English. stock market) is part of the monetary and financial turnover of the market. The essence of RZB is the purchase and sale of securities and their issuance. Securities market is represented by a network of banks, stock exchanges, as well as other specialized financial institutions. Money of individuals, legal entities and the state are accumulated through the RZB. The securities market interacts with the system of bank credit.
RZB and the stock market are usually equated, but there is a significant difference: since not all securities are derived from money capital, the stock market cannot be fully attributed to the financial market. To the extent that RCB is based on money as capital, it is called a stock market and in this capacity it is a part of the financial market.
The stock market forms the majority of the securities market, the rest being the commodity securities market (commodity options and futures etc.).
Thus, the securities market = stock market + commodity securities market.
What is the purpose of the securities market?
The purpose of the securities market is to accumulate financial resources and provide an opportunity to redistribute them by carrying out various securities transactions by various market participants, i.e. to mediate the movement of temporarily free funds from investors to securities issuers.
Who is a participant of the securities market?
Securities market participants can be divided into three groups:
- issuers - persons who issue securities in order to raise the money they need;
- Investors - persons who purchase securities in order to receive income, property and non-property rights;
- intermediaries - persons who provide services to issuers and investors to help them achieve their goals.
What types of securities markets exist?
RCB is divided into primary and secondary:
- The primary market is where securities are issued and placed.
- On the secondary market, there is circulation securities.
Depending on the timing of securities transactions, the securities market is divided into:
- spot market, when securities are exchanged for cash almost at the time of the transaction..;
- futures market, where futures contracts are traded.
In addition, a distinction is made according to the timing:
- The short-term securities market is a segment of the securities market, where securities with a term of less than one year are placed and traded. It represents the main part of the capital market. Short-term securities are mostly simultaneously payment and settlement or credit instruments (bills of exchange, checks). There are also purely short-term securities - short-term debt obligations of the state;
- Long-term securities market is a segment of the securities market, where securities with a term of at least one year are placed and traded. It represents the main part of the capital market.