Ppt on stock market trading

1 C HAPTERS 5, 2, L ecture N otes The Stock Market (Chapter 5) Buying and Selling Securities (Chapter 2) Introduction to Stocks (Lecture) “Don’t gamble!

NYSE  In 2005, purchased Archipelago electronic exchange and the Pacific regional exchange  Became a publicly traded corporation in March of 2006  When they merged with the Euronext electronic exchange  Phased out face-to-face, double auction trading  In favor of exclusively trading electronically  In 2011, Germany’s stock market tried to purchase the NYSE but was blocked by European regulators  On November 13, 2013, the/


Efficient Capital Market An efficient capital market is a market where the share prices reflect new information accurately and in real time. Capital market.

investors. The capital market handles the trading of stocks and bonds. The secondary bond markets play a market place for the bonds that are already issued in the primary market while the secondary stock market trades those stocks that are already issued by the issuers. The treasury bills secondary market handles the trading of treasury bills. The secondary market trading is vital for the capital market. A study in the secondary market trend can give some/


WEEK 6 SECONDARY MARKETS. Fuctions of the Secondary Markets It provides information about the value of the security. It provides information about the.

stock exchanges. Additional significant trading in stocks take place on OTC markets. Some bonds are traded on exchanges however most bonds are trade on OTC markets. In US, many shares are traded on major national and regional stock exchanges. Additional significant trading in stocks take place on OTC markets. Some bonds are traded on exchanges however most bonds are trade on OTC markets. Londan International Stock Exchange is an OTC market. Assets that are traded in this market include stocks/


Stock Exchange. 2 A stock exchange is a corporation which provides facilities for stock brokers and traders (dealers) to trade company stocks and other.

important securities and only in standard volume - lot or in its multiple. 44 System for support stock and bond market Trading in SPAD has two phases:  open phase: from 9.30 to 16.00. It this phase are announced bid and call prices of titles by market makers. From this information is counted official SPAD bid and call price with fluctuation belt of 0/


Aswath Damodaran1 Market Frictions: Undiversified Investors, Illiquidity and Control Aswath Damodaran www.damodran.com.

no other differences (in voting rights or dividends, for instance) across the classes, the difference in prices can be attributed to liquidity. Chen and Xiong (2001) compare the market prices of the traded common stock in 258 Chinese companies with the auction and private placement prices of the RIS shares and conclude that the discount on the latter is 78% for auctions and/


C.S. 793 Data Mining for Commodity Trading Notes on Commodity Trading Also consult the many text (not required to buy) shown on the syllabus.

buy/sell  15 stocks at > $1M total. Stock index arbitrage traders buy/sell stock index futures contracts, sell/buy portfolios of  500 stocks matched against the futures trade. Portfolio insurance created a synthetic put option on a stock portfolio by dynamically trading stock index futures according to a computer model based on the Black-Scholes option pricing model. Both strategies were blamed for 87 stock market crash. Yet the impact/


Economics 12 [Stock Market] Introduction. What is a stock?  A stock represents partial ownership of a corporation. When you buy shares of a stock, you.

the longer one.  Relative Strength Index: This index measures whether a stock is overbought or oversold. The RSI measures the stock movement from one close to the next and therefore, the strength of the prevailing stock trend. Stock Market Game  Go to www.updown.com  Click on Join UpDown  Complete the application form  Start trading! Stock Dividends  Dividends are like a small reward that a company pays/


WEEK 6 SECONDARY MARKETS. Fuctions of the Secondary Markets It provides information about the value of the security. It provides information about the.

stock exchanges. Additional significant trading in stocks take place on OTC markets. Some bonds are traded on exchanges however most bonds are trade on OTC markets. In US, many shares are traded on major national and regional stock exchanges. Additional significant trading in stocks take place on OTC markets. Some bonds are traded on exchanges however most bonds are trade on OTC markets. Londan International Stock Exchange is an OTC market. Assets that are traded in this market include stocks/


CHAPTER 11 The Efficient Market Hypothesis. Topics Definition of Market Efficiency –Random walk process –Rapid price adjustment –Incapable of beating.

necessary if investors are to have trust in U.S. stock markets. –The United States Securities and Exchange Commission (SEC) enforces laws concerning illegal trading activities. It is important to be able to distinguish between: –Informed trading –Legal insider trading –Illegal insider trading 55 Informed Trading When an investor makes a decision to buy or sell a stock based on publicly available information and analysis, this investor is/


1 C HAPTERS 5, 2, L ecture N otes The Stock Market (Chapter 5) Buying and Selling Securities (Chapter 2) Introduction to Stocks (Lecture) “Don’t gamble!

NYSE  In 2005, purchased Archipelago electronic exchange and the Pacific regional exchange  Became a publicly traded corporation in March of 2006  When they merged with the Euronext electronic exchange  Phased out face-to-face, double auction trading  In favor of exclusively trading electronically  In 2011, Germany’s stock market tried to purchase the NYSE but was blocked by European regulators  On November 13, 2013, the/


CHAPTER 3. 3-2 How firms issue securities Primary vs. secondary market Privately held vs. publicly traded companies Initial public offerings Market transactions.

3.5 Price-Contingent Orders 3-16 3.2 How Securities Are Traded Trading Mechanisms Dealer markets Over-the-counter (OTC) market: Informal network of brokers/dealers who negotiate securities sales NASDAQ stock market: Computer-linked price quotation system for OTC market Electronic communication networks (ECNs) Computer networks that allow direct trading without market makers Specialist markets Specialist: Makes market in shares of one or more firms; maintains “fair and orderly/


Securities Markets Chapter 3 Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin.

-19 3.3 U.S. Security Markets 3-20 U.S. Security Markets Overview Nasdaq Small stock OTC –Pink sheets Organized Exchanges –New York Stock Exchange –American Stock Exchange –Regionals Electronic Communication Networks (ECNs) National Market System 3-21 NASDAQ Dealer market is a market without centralized order flow NASDAQ: largest organized stock market for OTC trading; information system for individuals, brokers and dealers Securities: stocks, most bonds and some derivatives Dealer/


Copyright © 2003 by South-Western. All Rights Reserved. CHAPTER TWENTY FINANCING AND INVESTING THROUGH SECURITIES MARKETS Text by Profs. Gene Boone & David.

income Copyright © 2003 by South-Western. All Rights Reserved. SECURITIES EXCHANGES Stock exchange (stock market): centralized marketplace where primarily common stocks are traded Stock exchange (stock market): centralized marketplace where primarily common stocks are traded Stock exchanges are secondary markets, selling securities which have already been issued by firms and sold in the primary market Stock exchanges are secondary markets, selling securities which have already been issued by firms and sold/


©2009, The McGraw-Hill Companies, All Rights Reserved 8-1 McGraw-Hill/Irwin Chapter Eight Stock Markets.

Rights Reserved 8-17 McGraw-Hill/Irwin Secondary Stock Markets Secondary stock markets are the markets in which stocks, once issued, are traded among investors The U.S. has three major stock markets –the New York Stock Exchange Euronext (NYSE Euronext) –the National Association of Securities Dealers Automated Quotation (NASDAQ) –the American Stock Exchange (AMEX) Secondary stock markets are the markets in which stocks, once issued, are traded among investors The U.S. has three major/


Chapter 7 Stock Price Behavior and Market Efficiency.

necessary if investors are to have trust in U.S. stock markets. –The United States Securities and Exchange Commission (SEC) enforces laws concerning illegal trading activities. It is important to be able to distinguish between: –Informed trading –Legal insider trading –Illegal insider trading 38 Informed Trading When an investor makes a decision to buy or sell a stock based on publicly available information and analysis, this investor is/


An Overview of Finance Chapter 1. Career Opportunities in Finance uFinancial markets uInvestments uManagerial finance.

or privately held F even insiders cannot earn abnormal returns Types of Financial Markets uMoney Markets F instruments traded mature in one year or less uCapital Markets F includes instruments with maturities greater than one year Types of Financial Markets uDebt Markets F treasury, corporate, mortgage-backed, money market, municipal, etc... uEquity Markets F stock markets Equity Markets uPrimary F corporations raise funds by issuing new securities uSecondary F securities are/


Securities Markets Chapter 3 Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin.

-19 3.3 U.S. Security Markets 3-20 U.S. Security Markets Overview Nasdaq Small stock OTC –Pink sheets Organized Exchanges –New York Stock Exchange –American Stock Exchange –Regionals Electronic Communication Networks (ECNs) National Market System 3-21 NASDAQ Dealer market is a market without centralized order flow NASDAQ: largest organized stock market for OTC trading; information system for individuals, brokers and dealers Securities: stocks, most bonds and some derivatives Dealer/


European Commission TAIEX Workshop on regulation of the stock exchange activity Kyiv, 29 – 30 June 2011.

Börse Privileges Reputation development and opportunity to gain additional services (corporate finance) Stabilization or creation of customer relation Possible trading profits from market making and arbitrage Motivation 42 Add-On Services Designated Sponsors may offer to respective Listed Companies Designated Sponsor Trading Stock Analysis Issuing Establishment Services Sales Chinese Walls: Law to Prevent Compliance Infraction 1. Consulting and support to aid in the/


Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter Eight Stock Markets.

was purchased by ICE in 2013. the National Association of Securities Dealers Automated Quotation (NASDAQ) Bats/Direct Edge (former ECNs) Secondary stock markets are the markets in which stocks, once issued, are traded among investors The U.S. has several major stock markets the New York Stock Exchange Euronext (NYSE/Euronext) The NYSE/Euronext Exchange was purchased by ICE in 2013. the National Association of Securities Dealers Automated/


Chapter 5 The Stock Market. Learning Objectives Take stock in yourself. Make sure you have a good understanding of: 1.The difference between primary and.

buyers and sellers together but does not maintain an inventory. –60% of the total dollar volume of all shares in U.S. stock market trade here –Trades are executed when a buyer and a seller are brought together by a broker and the trade takes place directly between the buyer and seller [and/or specialist (to be explained later)] –However, specialists sometimes act as “exclusive/


1/27 TOPIC 12 STOCK MARKET. 2/27 Chapter Preview We highlight the basics of stocks market, then review the underlying theories for stock valuation. Topics.

even include this fact in their advertising. Microsoft, for example, is not listed on any organized exchange, yet its stock had a total market value of over $251 billion in late 2010. Where does it sell its stock??????? 13/27 Stocks Trading 2. Over-the-counter markets: Trading occurs over sophisticated telecommunication networks  Example is NASDAQ- National Association of Securities Dealers Automated Quotation System  Currently has 3/


Securities Markets Chapter 3 Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin.

-19 3.3 U.S. Security Markets 3-20 U.S. Security Markets Overview Nasdaq Small stock OTC –Pink sheets Organized Exchanges –New York Stock Exchange –American Stock Exchange –Regionals Electronic Communication Networks (ECNs) National Market System 3-21 NASDAQ Dealer market is a market without centralized order flow NASDAQ: largest organized stock market for OTC trading; information system for individuals, brokers and dealers Securities: stocks, most bonds and some derivatives Dealer/


Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.1 CHAPTER 13 Common Stock Market: I.

) Four major types of markets on which stocks are traded First Market: trading which occurs on organized, physical exchanges Second Market: trading in the OTC market of stocks not listed on an exchange 9 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall. Overview of Trading Locations in the U.S. (continued) Four major types of markets on which stocks are traded Third Market: trading of listed stocks in the OTC market Fourth Market: institutional transactions which occur/


Markets in Uncertainty: Risk, Gambling, and Information Aggregation

also exists inter-personal weighting: In the stock market, my opinion matters less than Warren Buffett’s There’s two ways to get rich in America (and hence get many votes in the market): Be good at prediction, and alternatively be smart. Only one way to get rich in a virtual world: A history of good trading. And this then also suggests that Bayesian/


CHAPTER 9 Security Futures Products Introduction

If you have insight into the future direction of the stock market, specifically one index or another, you may want to trade stock index futures. Stock index futures allow you to make a bet on which direction you think a stock market index is headed. Stock index futures also allow you to hedge various financial positions. Stock index futures trade on a number of different indexes. Chapter 9 Indexes The/


XI. MARKET EFFICIENCY.

] found that insider trading within the 10b5-1 plans outperforms the market by 5.6% over six-month periods. G. Anomalous Efficiency and Prediction Markets The Challenger Space Shuttle Disaster On January 28, 1986, at 11:38 AM Eastern Standard Time, the space shuttle Challenger was launched in Florida and exploded 74 seconds later ten miles above ground. The stock market reacted within minutes of/


III. INSTITUTIONAL TRADING

on naked access. In November 2010, largely in reaction to the May 6, 2010 "flash crash" (the "flash crash" had nothing to do with flash trading), the SEC voted for a ban on naked access in stock markets, requiring brokers "to put in place risk management controls and supervisory procedures to help prevent erroneous orders, ensure compliance with regulatory requirements, and enforce pre/


II. FINANCAL MARKETS, TRADING PROCESSES AND INSTRUMENTS

, Inc. EDGA Exchange, Inc. EDGX Exchange, Inc. International Securities Exchange, LLC The Nasdaq Stock Market LLC National Stock Exchange, Inc. New York Stock Exchange LLC NYSE Arca, Inc. NASDAQ OMX PHLX, Inc. (formerly Philadelphia Stock Exchange) Futures and Partially Exempt Exchanges U.S. Futures Exchanges Board of Trade of the City of Chicago, Inc. CBOE Futures Exchange, LLC Chicago Mercantile Exchange One Chicago, LLC The Island/


XII. TRADING GONE AWRY. A. Illegal Insider Trading Unfair capital markets fail to draw capital. Illegal insider trading is traditionally defined as the.

profit for the quarter. – The absence of filters either at the bank or at the Tokyo Stock Exchange to prevent such an obviously erroneous trade played havoc with the market for J-com stock, and caused the entire Nikkei-225 to drop by 1.72%. – The broader market reaction was largely in response to traders attempting to guess which firm had made the mistake, driving/


Herding in Financial and Political Markets Khurshid Ahmad, Chair of Computer Science Trinity College, Dublin, IRELAND 13-15 th Feb. 2013.

$13.39 trillion as of Dec 2010. The US GDP in 2009 was 14.39 trillion; the stocks traded on NYSE were 11.76 trillion Herding Basics: Evergrowing Equity Markets Herding Basics: Evergrowing Equity Markets Herding Basics: Evergrowing Equity Markets Herding Basics: Evergrowing Equity Markets Total Occurrences in Traded Volume at NYSEPrediction by Random Walk Deviation from Mean within Every X days 1 Std. Dev.21.5/


Dr. Hsinchun Chen Director, Artificial Intelligence Lab

: NSF CRI; NSF EXP-LA; DOD DTRA, CTFP, NPS; (ARFL WMD, CIA, FBI) PREDICITNG MARKET MOVEMENTS Predicting Markets Markets: international markets, emerging markets, import/export markets, financial market, stock market, commodity market, retail market Economics (macro), international relations (trade, geopolitics), finance (international/banking/stock), accounting (market return), marketing (sales/retailing) US (NSF SBE, social behavioral economics; governments, think tanks), Europe/Asia  Business school/


Domestic Investors Herding Behavior in Reaction To Foreign Trading Yea-Mow Chen Department of Finance San Francisco State University.

: 1. We design a VAR model to examine how domestic investors react to the foreign investors trading in pre- and post-Asian financial crisis periods. 2. We test the causal relationship between foreign investors and domestic investors based on stock market capitalization, average return, volatility of foreign trading volume, and the percentage of foreign investors holdings. II. Literatures on Herding II.1. Herding and/


1 Personal Finance: Another Perspective Investments 3: Securities Market Basics.

company that is already publicly traded 5 Types of Securities Markets (continued) What is traded in the secondary markets, i.e., markets where existing securities trade? Secondary markets trade previously owned shares of stocks, bonds, and other securities What do secondary markets consist of? Secondary markets consist of organized exchanges and over-the-counter or electronic markets where existing shares are traded 6 Secondary Markets: Organized Exchanges What are organized stock exchanges? Areas used to/


Research in the Area of Market Microstructure J.C. Lin Collette Endowed Chair of Financial Services and Professor Louisiana State University Prepared for.

has no incremental predictive ability. – suggesting that informed investors initiate trades in the stock market only. Option quote revisions, as well as stock quote revisions, have predictive ability for subsequent quote revisions in the other market. – implying that while information in the stock market is contained in both quote revisions and trades, information in the option market is contained only in quote revisions. Discussion The evidence that option quote/


Trading mechanisms, Roll model

(solid circles), absolute value of transaction price returns (open circles), returns of midprice sampled before each transaction (filled triangles), and returns of midprice sampled at each market event (filled squares) for the AstraZeneca (AZN) stock traded at LSE in 2002. The lags on the horizontal line are measured in event time. Time series perspective The autocovariance structure of transaction price increments in the/


The Stock Market, Information, and Financial Market Efficiency

in size. The exchanges are ranked on the basis of the total value of the shares traded on them.• Stocks and the Stock Market Measuring the Performance of the Stock Market Stock market index An average of stock prices that is used to measure the overall performance of the stock market. Figure 6.2 World Stock Exchanges, 2009 The graphs show that all three indexes follow roughly similar patterns, although the NASDAQ/


Algorithmic Trading: An Overview of Applications And Models. Ekaterina Kochieva Gautam Mitra Cormac Lucas.

individual, partnership, corporation or group of firms. Prototypical trading systems Call (periodic) auction — selling stocks by bid at intervals throughout the day. The orders are stored for execution at a single market clearing price. Continuous auction — buyers enter competitive bids and sellers place competitive offers simultaneously. Continuous, since orders are executed upon arrival. Dealership markettrading occur between principals buying and selling to their own/


Market Specific - Hong Kong. 2 Market Specific – Hong Kong Agenda Equity Hong Kong Stock Exchange (HKEx) Futures & Options Hong Kong Futures Exchange.

.hkex.com.hk/eng/invest/company/quote_page_e.a sp?WidCoID=1&WidCoAbbName=&Month=1&langcode=e e.g. Stocks historical prices: http://www.hkex.com.hk/eng/invest/company/chart_page_e.asp ?WidCoID=1&WidCoAbbName=&Month=3&langcode=e# 14 Market Specific – Hong Kong HKSE Trading Features Trading types (FID 975) Automatch Direct (Y) Automatch Non-direct ( ) Manual or Special Lot Direct (X) Manual or/


DAVID FRANASIAK WILLIAMS & JENSEN, PLLC MEETING OF INTERNATIONAL STOCK EXCHANGE EXECUTIVES EMERITI MARCH 25, 2012 The Regulatory Landscape – Current Regulatory.

attract retail order flow to the NYSE for NYSE-listed securities and to NYSE Amex for NYSE Amex-listed securities as well as securities listed on the Nasdaq Stock Market and traded pursuant to unlisted trading privileges. The proposed Retail Liquidity Program would allow such order flow to receive potential price improvement. On February 7, 2012, the SEC instituted a proceeding to see whether/


Copyright © 2011 Pearson Prentice Hall. All rights reserved. Chapter 13 Investor Behavior and Capital Market Efficiency.

© 2011 Pearson Prentice Hall. All rights reserved. 13-59 13.7 Multifactor Models of Risk (cont’d) Selecting the Portfolios –Book-to-market Ratio Strategy A trading strategy that each year buys an equally- weighted portfolio of stocks with a book-to-market ratio less than the 30th percentile of NYSE firms and finances this position by short selling an equally- weighted portfolio of/


Common Stock Basics 1. Definition: Stocks are A type of security that signifies ownership in a corporation and represents a claim on part of the corporations.

.8% 6.8% 6.4% 5.7% 4.5% Last 50: 11.9% 5.8% 5.3% 5.7% 4.4% Source: Ibbotson and Sinquefield, “Stocks, Bonds, Bills and Inflation 2010 yearbook,” Chicago. Stock Market Basics Most stocks are traded on exchanges, which are places where buyers and sellers meet and decide on a price. Some exchanges are physical locations where transactions are carried out/


CME Stock Index Futures & Options Mexico City: October 12, 2006.

s 500 … Represents 500 leading blue chip US equities, weighted by market capitalization Think of S&P 500 as high-cap, blue chip stock index NASDAQ-100 … Represents top 100 non-financial stocks traded on NASDAQ system Utilizes a modified capitalization weighting system Heavily influenced by/ outperform in low rate environment. FOMC begins series of measured tightening in late 2004. 2000- 2002 Stock market declines sharply as tech “bubble” collapses. FOMC aggressively eases Fed Funds down to 1%. This favors/


Active versus Passive Investing Chapter 6. There are two theories about how markets work. The first is that smart people, working diligently, can somehow.

first is that smart people, working diligently, can somehow discover pricing errors that the market makes. In other words, they can discover which stocks are undervalued (GE is trading at 30, but it is really worth 40) and buy them. And they can discover which stocks are overvalued (IBM is trading at 30, but it is really worth 20) and avoid them; or, if they/


The NYSE And NASDAQ.

." Anthony Stockholm was elected the Exchanges first president. NASDAQ The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange . "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations Systems," but the exchanges official stance is that the acronym is obsolete. It is the largest electronic screen-based equity securities trading market in the United States and fourth largest by/


Chapter McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. 7 Stock Price Behavior and Market Efficiency.

necessary if investors are to have trust in U.S. stock markets. –The United States Securities and Exchange Commission (SEC) enforces laws concerning illegal trading activities. It is important to be able to distinguish between: –Informed trading –Legal insider trading –Illegal insider trading 7-25 Informed Trading When an investor makes a decision to buy or sell a stock based on publicly available information and analysis, this investor/


Money and Capital Markets Chapter 8. Introduction Market for U.S. government securities is the center of the money and capital markets U.S. Treasury has.

percentT = 182 days YIELD ON A BANK DISCOUNT BASIS: COUPON EQUIVALENT: How the Market Works Most trading takes place in over-the counter markets Trading in government securities averages more than 20 times trading on the New York Stock Exchange Increasingly traded around the clock in different parts of the world How the Market Works Dealers get much of their inventory of bonds by bidding at competitive auctions/


© Paul Koch 1-1 Chapter 9. Mechanics of Options Markets I. Overview. A. Definitions. 1. Option - contract that entitles holder to buy/sell a certain asset.

. Offers both European & American options on: British £, Canadian $, €, Swiss Francs, Yen, Australian $, … c. There is also a well-developed OTC market in FC options. i. Interbank OTC mkt trades large denominations (> $1 MM). © Paul Koch 1-11 II.C. Underlying Assets 3. Stock Index Options. a. CBOE options: i. S&P 500 (SPX) - European; ii. S&P 100 (OEX) - American; iii. Nasdaq 100/


1 Efficient Market Theory Dr. Rana Singh Associate Professor www.ranasingh.org.

Tests and Results of Semistrong-Form EMH n Neglected Firms Firms divided by number of analysts following a stock Neglected firm effect caused by lack of information, crosses size classes Contradictory results from another study n Trading volume Studied relationship between returns, market value, and trading activity 26 Tests and Results of Semistrong-Form EMH n Firm size has emerged as a major predictor/


The Capital Markets Linkages among the OIC Member Countries OIC Member States’ Stock Exchanges Forum Istanbul, October 2-3, 2010.

this decision, both Task Forces worked together and prepared this joint work, including a guideline on how to establish a cross-trading environment among the OIC member countries. 2 3 Necessitates of Exchanges Linkages Liquidity is one of the most essential elements for a strong link between stock markets. Possible benefits associated with regional integration of exchanges are:  Diversified risk in a wider/


Iowa Electronic Markets Personal Finance and Portfolio Management Strategies Personal Finance Curriculum using the Federal Reserve Monetary Policy Market.

 Personal values – size of households, marital status, divorces, general norms and ethics  Economic forces – Federal Reserve policy, global influences, and market forces  Changing economic conditions– Consumer prices, spending habits, interest rates, Gross Domestic Product (GDP), balance of trade, and fluctuations in stock market indexes Significant Terminology Used in the Financial Planning Process The “time value of money” is the increase in an amount of/


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