The role of the stock exchange. Functions of speculators in stock markets The process of regulation in the stock market includes

Stock speculation.

Stock speculation– is making a profit as a result of speculative transactions with securities or goods on exchange markets.

For a long time, stock speculation was considered solely a means of profit and was not perceived by government institutions and society as something important that would benefit the economy.

“The soul of the stock exchange is speculation; without speculation, the stock exchange cannot fulfill its true national economic purpose, and as a result of this, government and all other policies aimed at eradicating speculation on the stock exchange are the fruit of a sad misunderstanding, to say the least,” wrote about exchange at the beginning of the twentieth century by a talented Russian economist, professor at the University of Dorpat, Yuri Dmitrievich Filippov.

The modern attitude towards exchanges, as well as towards speculative traders, is based on deep economic analysis and is fundamentally different from previous worldviews. And the point here is this. Indeed, the actions of stock speculators are driven not by concern for the welfare of the economy, but by quick profits. However, without meaning to, they perform several vital financial functions in stock markets. Their actions, like a flow of fresh blood, constantly heal the stock body, bringing invaluable benefits to stock markets and the economy as a whole. Let us list the main functions that stock speculators perform daily:

increasing market liquidity

smoothing price fluctuations

Increasing market liquidity: By carrying out hundreds of trading operations a day, speculators help increase market liquidity. That is, they create a market that allows you to quickly buy and sell. It is thanks to this circumstance that the number of sellers and buyers in the market is constantly increasing, between whom transactions of any scale can be carried out with a slight change in price. Which, in turn, promotes healthy competition, leading to the identification of an objective price.

Smoothing out price fluctuations: The activities of stock speculators have a direct impact on the stability of the stock market, smoothing out price fluctuations. Often, speculators' operations are directed against the movement of the market, that is, against the direction of price movement, which eliminates large price differences. Regulating the supply/demand balance is one of the important results of speculative activity.

Exchange trading.

When conducting stock exchange transactions, a trader must not only choose the right product, but also choose the type of transaction that will bring him greater profit. Classification of exchange transactions can be carried out according to different criteria. Thus, according to the degree of conditionality, transactions are distinguished - firm and conditional, and according to the time of execution - cash (or cash) and urgent. By following the link you can get more detailed information about:

So, stock speculation in the stock and commodity markets can be carried out using cash and forward transactions. For a cash transaction, payment occurs immediately or in the next 2-3 days. Futures transactions are transactions with deferred contract execution dates. That is, the deal is concluded today, and the date of its execution occurs after a certain period. Due to fewer opportunities compared to the derivatives market, and therefore less profit, speculators usually give preference to the derivatives market. Just because of two, but very significant restrictions, the derivatives market is the native element of stock speculators.

Restrictions on speculation on cash transactions:

On each exchange, speculators are represented by two types:

"Bulls"– stock market players playing for a “raise”. Anticipating an increase in the value of assets and contributing to this, they buy them in advance in order to later sell them at a profit. The nickname "bulls" is associated with the desire of players to raise prices "by the horns". The name "Bull market" refers to a market in which prices are rising.

The classic example of a permanent bull is Warren Buffett. An American billionaire, one of the richest men in the world, he has always relied on buying cheap and selling high. Buffett's $10,000 investment in Berkshire Hathaway in 1965 was worth about $51 million by the summer of 1999.

"The Bears"– stock market players are short-sellers. They enter into forward transactions (with a fixed price and delivery after a certain period of time) for exchange-traded goods that they do not have in stock, hoping to buy them before the contract is executed at a lower price. The word "bears" reflects the fact that they put pressure on prices, causing them to fall. This is where the concept of “bear market” comes from – a market with a steady downward trend in prices over a long period of time.

George Soros is a classic example of a conscious bear. He managed to earn billions from currency speculation thanks to an interesting feature of the market: stock quotes rise for a long time and with difficulty, but fall quickly and easily. Soros himself says that he likes to open short positions and make money on the fall.

As can be seen from the above examples, speculative profit is possible when playing both up and down. At the same time, it should be emphasized that in speculative operations losses are possible, very often significant. Therefore, engaging in speculative investments is a high-risk job for professionals.

Let us list the assets that are objects of stock exchange speculation:

The most understandable asset for most beginners. Probably because many people associate it with the “currency exchange” windows of commercial bank branches. All those who are mistaken will have to be disappointed; real currency trading is completely different.

Bonds.

Rarely used as an asset for speculative investments due to insignificant price changes. In this regard, they cannot compete with other, more convenient tools.

A favorite tool for speculative operations of venerable financial market tycoons. Most shares on the stock exchange are bought for speculation.

Futures.

Derivative financial instrument for professionals. Compared to stocks, you can earn much more on futures contracts, as well as lose more.

Another derivative financial instrument of the stock exchange. It is primarily of interest to investors who want to limit their risks while maintaining sufficient profits.

When transacting in securities, market participants can conduct real, speculative or arbitrage transactions.

Speculation on the stock exchange is a phenomenon as old as the stock exchange itself.

Before explaining why speculators are attracted to the stock market, we should briefly discuss why people speculate. There are two main motives in speculation: the possibility of profit and pleasure. Every speculator will agree with the first motive, but the second is often of greater importance. Some people are risk takers, and speculation is risky by definition.

This raises the question: is speculation different from gambling? Those who love speculative operations usually point out that in a game, risk is created for the sake of risk, while speculation is a mechanism for taking risk that already exists. For example, no one needs to lose or gain money depending on which card is dealt. Everyone can just give up on the game. However, someone must lose or gain money depending on whether the prices of stocks or bonds fall or rise, that is, whether the risk falls on the issuers of these securities or on one of the speculators.

The psychological motives of speculators do not differ significantly from the motives of gamblers. However, this speculation does shift the risk from those who do not want it to those who do. In other words, speculation in financial assets directs the desire to take risk in an economically productive direction.

Stock markets themselves are interesting and informative. One of the first things speculators discover is that very few events in the world do not affect stock or currency prices. Speculation makes those who just want to make a profit more aware of the world in which they live.

Most speculators are attracted by the hope of quick profits rather than concern for the well-being of the economy, yet they perform several vital functions in the stock markets that facilitate trading in stocks and financial instruments.

The presence of a large group of speculators in stock markets benefits both the stock exchange and the economy as a whole. The main functions that speculators took on:

Increasing market liquidity,

Relative smoothing of price fluctuations.

Increasing market liquidity. Speculators are an important source of market liquidity. The constant influx of orders from speculators into the trading floor can significantly reduce the time for counter orders to buy and sell to appear. In a liquid market with a large number of buyers and sellers, transactions can be carried out on any scale with little change in prices.

At the same time, the arrival of speculators, increasing the number of participants in operations, promotes competition, and ultimately more effective identification of an objective exchange rate.

Relative smoothing of price fluctuations. The activity of speculators contributes to the relative stability of the market and generally eliminates price fluctuations, since the operations of speculators are often directed “against the market,” that is, against the current main price trend. By purchasing assets at low prices, speculators help increase demand, which leads to higher prices. Speculators selling assets at high prices reduces demand and therefore prices. Therefore, sharp price fluctuations that are possible under other conditions are mitigated by speculative activity.

Source: Ed. prof. O.I. Degtyareva, prof. N.M. Korshunova, prof. E.F. Zhukova. Securities market and stock exchange business: Textbook for universities - M.: UNITY-DANA, - 501 p. 2004(original)

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Introduction

In economics, the concept of speculation is defined as making a profit by using price differences over time.

There are two main types of participants in futures markets: hedgers and speculators. Hedgers use the market to minimize price risks. In the wheat market, hedgers are individuals whose primary business is related to wheat; they grow it, process it, and sell it. Such people use the market to gain some certainty about the actual prices they will be offered to buy or sell wheat in the future. A farmer who has to sell wheat after harvest does not know what price he will get for it at the time of sale. He may decide to minimize the risk by selling some of the crop in advance on the futures market, issuing a commitment to deliver the commodity after harvest. On the other hand, a baker or miller may want to guarantee future supplies

In recent years, the growth of speculative transactions has noticeably increased; their objects have become not only futures contracts, but also options and combinations of transactions with futures and options.

The presence of speculators is vital to futures markets. The role of speculators in the economy will be discussed in this work.

1 . Concept and procedure of speculation and hedging

speculation futures operation hedging

A speculator is one of the specific subjects of market relations. A speculator is a person who strives to predict price fluctuations in order to extract profit by trading or trading futures contracts. In a civilized market, a speculator and a “black market” speculator are different types.

They also differ from each other: a speculator at the stage of market formation and a speculator in a mature market.

In the first case, he is not much different from an elementary swindler; in the second, he is a kind of corrector of normal market relations, using the difference in prices caused by differences in production and circulation costs in different regions.

The speculator does not use the futures market in connection with their production, processing, sale or transportation of the product.

Based on the economic nature of speculative transactions, speculators as subjects of market relations are heterogeneous.

The sale of goods in an area where there is a shortage, at prices much higher than those at which this product was purchased in an area where there is a surplus, is a kind of correction of the resulting imbalance in exchange and distribution. These types of trade transactions are acceptable.

Speculators are not interested in making or accepting delivery of a specific product.

In developed market relations, the speculator helps to establish the necessary proportions between the value of the commodity mass and the effective demand of the population.

In futures trading transactions, speculators perform useful functions:

1. simplifies the sale of goods and securities on the stock exchange;

2. compensates for failed transactions between sellers and buyers.

The speculator is one of the parties in hedging (insurance) operations. “He acts as a kind of intermediary between short hedgers (sellers) and long hedgers (buyers), in the regulation of trading methods. between them, during which the number of trade transactions increases and market relations develop. Speculators weaken price fluctuations on stock exchanges.

Stock speculators are divided into “bulls” and “bears”. “Bulls” play on the growth of exchange prices by purchasing contracts during periods of rising prices, expecting to sell them at an even higher price. While the “bears” sell contracts in the hope of buying them later at a lower price.

The goals of both types of speculators are to make a profit, although in different ways. The above division is not only arbitrary, but also unstable. This or that broker working on the stock exchange may be a “bull” in one case, and a “bear” in another.

Another type of speculators are scalpers. Most often they are professional dealers working at their own expense. They change their position almost daily, make many transactions, and easily catch the slightest fluctuations in market prices. Romanovsky A. A. Dealers in futures markets//Economic newspaper, 2015.P. 76

Speculators, as a rule, are involved in transactions in only one market. The exchange allows you to fruitfully use the price difference, or spread. Since the delivery times for the same product under contracts are very different, they will also be different.

Spreaders, another type of speculator, influence price fluctuations from normal levels. Spreaders sell goods at higher prices and buy goods at lower prices.

The functioning of various types of speculators on exchanges contributes to the fact that prices begin to more fully reflect the actual value of goods.

Speculation as a variety of business in the conditions of formation of market relations in our country will continue to develop.

Hedging (from the English hedge - insurance, guarantee) - opening transactions in one market to compensate for the impact of price risks of an equal but opposite position in another market. Typically, hedging is carried out with the aim of insuring the risks of price changes by concluding transactions in derivatives markets.

The most common type of hedging is hedging with futures contracts. The origin of futures contracts was caused by the need to insure against changes in commodity prices. The first transactions with futures were carried out in Chicago on commodity exchanges precisely to protect against sudden changes in market conditions. Until the second half of the 20th century, hedging (this term was already enshrined in some regulatory documents) was used exclusively to eliminate price risks. However, it should be noted that the purpose of hedging is not to eliminate risks, but to optimize them.

The hedging mechanism consists of balancing obligations on the cash market (commodities, securities, currencies) and the opposite in direction on the futures market.

2 . Functions of speculators and hedgers on futures markets

Operations in futures markets related to insurance of financial results are unthinkable without the existence of a special group of participants taking on the risk. Speculators perform this function in futures trading. They take on part of the risk of hedgers, which ultimately leads to an increase in the volume of capital circulating on the market and an increase in its liquidity.

Speculators are the largest but least successful group of participants in the futures market. Although there are no official statistics on the successes and failures of speculators in the futures markets, some expert assessments have been made. According to these estimates, only 10 to 30% of the total number of speculators had a net profit in each year of their activity 2. But this does not prevent new groups of participants in the futures market from trying their hand at speculative operations.

Most speculators are attracted by the hope of a quick net profit rather than concern for the welfare of the economy, however, speculators themselves perform several vital functions in the futures markets that facilitate trading in commodities and financial instruments.

Speculators take the hedgers' risk upon themselves. Without them, it would be very difficult, if not impossible, for hedgers to agree on a price because sellers (short position holders) demand the highest price, while buyers (long position holders) want to pay the lowest possible price and? it is quite difficult to regulate these mutual requirements.

Without speculators, sellers would be forced to accept offers despite low prices, and bidders despite high prices.

Speculators are like a bridge over this price gap between supply and purchase, which increases the overall price efficiency of the market.

Speculators help increase market liquidity, i.e. create a market that allows you to quickly sell and quickly buy. With the emergence of speculators in the market, the number of real buyers and sellers increases, and hedgers are no longer limited to simply hedging the risks of others.

Hedgers are persons associated with real trading, i.e. sellers and buyers of cash goods who seek to hedge against unfavorable changes in the prices of their goods. Although hedging with futures contracts has become an integral part of many industries, it is not the only means of protecting against price fluctuations.

In a liquid market with a large number of buyers and sellers, transactions can be carried out on any scale with little change in prices.

At the same time, the arrival of speculators, increasing the number of participants in transactions, promotes competition, and ultimately more effective identification of the objective price.

The activity of speculators contributes to the relative stability of the market and generally eliminates price fluctuations. By purchasing futures contracts at low prices, speculators help increase demand, which leads to higher prices.

Speculators selling futures contracts at high prices reduces demand and therefore prices. Therefore, sharp price fluctuations that are possible under other conditions are mitigated by speculative activity.

Speculation in the futures markets, like speculation in real commodities, can be either net profitable or unprofitable.

But unlike real commodity speculators, futures speculators very rarely have a need to purchase a real commodity or financial instrument that would close a futures contract.

They enter into contracts in the hope that prices will rise, with the goal of selling them at a higher price and therefore making a profit. They execute the sales contract, expecting that the prices will go down so that they can purchase it at a lower price and again make a net profit.

A unique feature of futures trading is that a speculator can start playing on the exchange, both buying and selling. Speculators' decision about whether they will sell or buy depends on the forecast of the market situation.

The potential net profit depends on the amount of risk that the speculator accepts and on his forecast of the market situation, or rather, his experience in forecasting price movements. The possible net profit and loss are equally large for both speculator-buyers and speculator-sellers.

3. Technique of speculative operations

The technique of speculative operations is quite simple: if at the first stage the speculator sells a futures contract, then at the second stage he purchases the same contract. And if at the first stage the player begins by purchasing a futures contract, then at the second stage he will sell.

If a speculator expects interest rates to rise and, therefore, he expects bond futures prices to fall, then opening a short position provides an opportunity to benefit from a fall in securities prices.

The speculator turned out to be profitable because he made correct predictions about price movements. However, the opposite situation is also quite possible.

If a speculator makes an incorrect forecast or does not pay attention to changes in one or more market conditions, he may end up losing money.

4 . Types of specs on futures markets

On futures markets, speculators are represented by two main types: downside bets and upside bets.

The reduction game is carried out by speculators selling futures contracts for the purpose of their subsequent purchase at a lower price. Speculators who engage in these transactions are called "bears."

The bullish game is carried out by buying futures contracts with the aim of their subsequent sale at a higher price. Speculators of this type are called "bulls".

Speculative net profit is possible both when playing for an increase and when playing for a decrease. At the same time, it should be noted that in speculative operations losses are possible, often quite significant. Therefore, engaging in speculative activities and investing in them is a high-risk business.

Different categories of participants can act as speculators on commodity exchanges. Very often this is done by professional dealers - who carry out transactions on their own behalf, at their own peril and risk.

At the same time, it can also be “non-professionals” - various organizations and individuals (the so-called “public”) trading through brokerage firms. Kovnch De Sh., Takki K. Hedging strategies. - M.: INFRA-M, 2013. p. 98

Speculators can be divided into large and small. However, these concepts are very conditional and can be understood differently on different exchanges. To brokers and their clients / Ulybin K.A., Androshina I.S., Kharisova N.L. and others - M.: Institute of Youth, 2011. p. 123.

Speculators whose volume of transactions is less than this certain level are considered small. To a certain extent, speculators can be divided by differences in the methods of forecasting market conditions that they use.

Thus, the first group of speculators uses fundamental market analysis, i.e., the main attention is paid to changing the factors that characterize supply and tension in the market.

The second group mainly uses triclad analysis, i.e., it is based on information about price dynamics, transaction volumes, and interest rates.

Speculators are also divided according to the methods of conducting their operations, according to the strategy and tactics of trading.

Highlight:

* positional speculators, who can be both professionals and non-professionals. They hold their position for a number of days, weeks or even months. Their forecast is usually based on long-term price dynamics, and short-term fluctuations are not taken into account;

* overnight speculators who hold a position for one day of trading. They allow significant price movements during the day, and very rarely roll over the position to the next day. Kovnch De Sh., Takki K. Hedging strategies. -- M.: INFRA-M, 2013. P.87. Many of them are members of the exchange and carry out their transactions on the floor.

* scalpers who trade on the floor only in their own interests. They take advantage of the slightest price fluctuations. During the day they sell and buy a large number of contracts, and by the end of the day they are closed. Ring of "bulls" and "bears". -- M.: Politizdat, 2014. P. 16. With insignificant profits (or losses) on one operation, they obtain the required level of profit due to the volume of operations. The activity of scalpers especially contributes to market liquidity, as they account for the majority of transactions. This tactic is also used mainly by professional speculators who trade for their own account;

* spreaders, which use the difference in prices for different but interrelated futures contracts. The spreader's net profit appears when using a certain ratio of prices for contracts for one product group with different terms, or for different product groups with one term.

5 . Strategy and tactics of speculative operations

Fruitful operations require the development of a strategy of speculation, analysis and price forecasting, and the ability to effectively use the capital allocated for the operation.

For fruitful speculative trading, a speculator must, firstly, specialize in a particular market, and, secondly, limit the number of open positions he simultaneously controls.

The number of simultaneously controlled positions is set taking into account the time factor that the speculator wishes to devote to speculative activities. So, for example, for non-professional speculators who do not have the opportunity to devote all their time to this activity, it is considered prudent to have no more than five open positions at a time.

For professional speculators who have staff and special equipment at their disposal, this limit can be one hundred positions.

Tactics of operations and competent management of available financial resources play a very significant role in fruitful futures trading. Effective money management will not provide a net profit when making bad decisions, but it can mitigate the impact of unprofitable transactions on the speculator's position.

In managing financial resources, three factors are correlated: risk, possible net profit and the amount of available capital.

Speculators in the futures markets often assess risk by comparing only the contract price and the amount of initial margin. This is actually not true. The initial margin is only a guarantee of proper execution of the contract. And the risk limit is either the full value of the contract (in the case of a long position), or unlimited (in the case of a short position).

However, this is only a theoretical tertiary consideration, since prices often reach zero. How can one practically assess the degree of risk? The risk of a futures position consists of the following parts:

* firstly, the amount that the speculator is willing to lose before he gives the order to close the position,

* secondly, the slip factor, which takes into account the possibility that market conditions lead to a significant difference between the actual closing price of a transaction and the expected closing price. Redhead K. and Hyos S. Financial Risk Management. -- M.: INFRA-M. 2013. P. 234.

Consequently, the effect of the second factor is manifested, which is much more difficult to assess. When characterizing a possible real loss, it is necessary to analyze the size of price fluctuations during the day, as well as the fluctuation of opening prices from the closing prices of the previous day. Commodity exchange - how to create it? - M.: Economics, 2011. P. 34.

Conclusion

Based on the study, the following conclusions can be drawn:

The speculator is not interested in owning the cash commodity, his main goal is to correctly predict changes in futures prices and benefit from this by buying and selling futures contracts.

A speculator buys futures contracts when he anticipates a subsequent increase in prices, expecting to sell them later at a higher price. He sells futures contracts in anticipation of falling prices in the future, with the hope of buying them back at a lower price and making a net profit.

Futures markets provide speculators with a very attractive profit opportunity through high levels of financial leverage. As a rule, only 5-10% of the contract value should be contributed to make it possible to profit from the change in the value of the entire contract.

A one-day speculator maintains a position open during that trading day, often carrying it over to the next day. The volume of his operations is less than that scalp.

A positional speculant maintains a position for a certain period of time - from several days to several months. A positional speculator is not interested in taking advantage of small price fluctuations, but rather plays on long-term market trends.

A spreader operates using the price ratio of several futures contracts.

Speculators typically use two methods of predicting prices - fundamental analysis, or analysis of supply and demand factors, and technical analysis, based on charting changes in prices, trading volume and open/position.

The basics of successful speculative trading are developing a transaction plan, determining the ratio of profits and losses, the principle of limiting losses and a thorough study of the markets.

Hedgers are providers of real goods and services, and futures and options markets help improve their efficiency. Futures trading could not exist without the active participation of hedgers. It is hedgers who provide a regular and two-way flow of buy and sell orders, which ultimately ensures the success of the futures contract. Unlike speculators and traders, who can switch their interest from one market to another, hedgers are, in a sense, “prisoners” of their market. It is their constant attention to price changes that ensures a regular influx of orders and transactions in the futures markets.

The number of real market participants whose interest in reducing price risk makes them hedgers varies depending on a number of factors:

§ the volume of the corresponding cash market;

§ level of price instability (possible risk);

§ knowledge and accessibility of futures and options markets.

Bibliography

1. Exchange and exchange operations. -- Kemerovo, 2012.

2. To brokers and their clients / Ulybin K.A., Androshina I.S., Kharisova N.L. and etc. -- M.: Institute of Youth, 2011.

3. Burenin A.N. Futures, forwards and options markets. -- M.: Trivola TOO, 2014.

4. Zavadsky P. L. Encyclopedia of economic terms. - M., 2015.

5. Ivanov K. Futures and options: hedging mechanism. -- M., 2014. (Exchange portfolio)

6. Kovnch De Sh., Takki K. Hedging strategies. -- M.: INFRA-M, 2013.

7. Ring of “bulls” and “bears”. -- M.: Politizdat, 2014.

8. Romanovsky A. A. Dealers in futures markets // Economic newspaper, 2015.

9. Redhead K. and Hyos S. Financial Risk Management. -- M.: INFRA-M. 2013.

10. Commodity exchange -- how to create it? -- M.: Economics, 2011.

11. Commodity exchange, securities market. -- M., 2014.

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The stock exchange is a traditional and permanent securities market with a specific place and time for the sale and purchase of previously issued securities. It is an important element of the modern economic mechanism. Being the oldest representative of the market economy, the stock exchange has played and continues to play a huge role in the mobilization, distribution and redistribution of capital.

Although transactions on the stock exchange are divided into investment ones, associated with the long-term investment of funds, and speculative ones, which are short-term in nature to achieve profit, almost both types of transactions are subordinated to the main goal of the exchange mechanism - obtaining high profits.

When considering the issue of stock exchange speculation, it is necessary to distinguish two sides in the activities of the securities market: firstly, associated with the investment of monetary capital in securities through which actual financing of reproduction is carried out, and secondly, due solely to the purposes of profit and not related to reproduction. The main goal of the second party in the activities of the stock market? obtaining high income based on exchange rate differences. Moreover, this is typical for securities of all main types: shares, private and government bonds. At the same time, priority in stock market speculation belongs to private securities, especially shares. Exchange? This is not only a kind of market, but also a way to get rich relatively quickly through transactions with securities. In a market economy, this determines the mechanism of stock market speculation.

But, nevertheless, in the stock market, as in the economy as a whole, speculation should not be considered only from the external side of the possible easy enrichment of certain individuals. Behind its facade one should see the specific meaning and functions that it performs. Firstly, the speculative potential of securities contributes to an additional increase in investors' interest in securities and thus maximizes the mobilization of society's funds in the interests of production. Speculative desire, i.e. the desire to get rich quickly forces investors to invest in the development of new and risky enterprises, without which the progress of society would be significantly hampered. Secondly, speculation helps to increase and maintain a high degree of liquidity of securities, which makes them attractive to investors. Thirdly, speculation helps stabilize securities prices and prevents their sharp fluctuations since, as a rule, speculators will act on opposite market trends: buy when the majority of investors sell, and sell when the majority buys. Speculative operations are most typical when there are strong fluctuations in security rates. But large price fluctuations often mean that there is a shortage of securities on the market, and accordingly the scale of speculation is small.

In the post-war years, the stock exchange played a big role role in organizing holding companies, since partly through a speculative mechanism, the purchase of controlling stakes was carried out by industrial and financial magnates, as well as monopolistic groups. This made it possible to create a wide network of holding companies that provided control over groups of commercial and industrial corporations, over various industries and areas of the economy. All this happened with the widespread involvement of the mechanism of stock speculation. If in the initial stages the stock exchange played an intermediary role in the formation of joint stock companies, then in modern conditions it began to perform the same function in the creation of holding companies. The creation of holding companies makes it possible to ensure control over a group of banks through the purchase of controlling stakes both on the stock exchange and outside it. Formally, banks remain independent units, maintaining their own board and balance sheet. The functions of holdings are not limited to control. They also carry out numerous mergers and consolidations of subsidiary banks, creating large institutions that can compete with other banking monopolies. Although banks have retained their legal independence in the field of credit and investment operations, the distribution of profits is made somewhat dependent on the general policy of the group of industrial conglomerates that have controlling stakes in these banks. They are usually headed by henchmen of banks or the bankers themselves. The advantages of holding companies with one bank arise from the following: a broader and more stable monetary basis for the conglomerate arises; also, when the demand for monetary resources increases, the bank in its credit policy will give preference to other subsidiaries in the holding system. Now many leading commercial banks are holding companies. Such organizations may include one bank, or two, or even more. Government measures, while somewhat making it more difficult for bank holding companies to absorb commercial and industrial companies, did not have a restraining effect on commercial banks' monopolization of the concentration of money capital. After this, bank holding companies began not only to increase the number of medium and small banks in their sphere of influence, but also to actively penetrate the insurance business.

Speaking about the role of the stock exchange, it is worth noting the reasons and significance of the dynamics of stock prices.

The development of the stock exchange depends on the reproduction cycle. Therefore, the stock exchange reacts very clearly to the processes occurring in the economic life of society. The classic reaction of the stock exchange to the course of the reproduction process is that in conditions of a crisis or a downward trend, the price of securities (stocks and bonds), as a rule, falls, and during a boom or upward trend it rises sharply. At the same time, at various stages of the reproduction cycle (crisis, depression, recovery, recovery), the exchange rate of securities may change under the influence of any special political or economic events, and in some cases may not correspond to one or another phase of the cycle. This is especially typical for modern society, when the mechanism has become extremely complicated due to the impact of inflation, the currency and fuel and energy crises, and imbalances in the balance of payments and trade. The modern cycle, associated with industrial and structural crises, significantly affects the mechanism of the stock exchange, distorting the prices of securities and shares. The economic situation is a decisive factor influencing the state of the stock exchange. The dynamics of stock prices reflects the movement of the reproduction cycle. A significant drop in stock prices shows a deterioration in economic indicators: rising unemployment and foreign trade deficits, and the persistence of public debt. Falling stock prices make some companies highly vulnerable to takeover by stronger competitors. Predatory companies have free capital and want to buy shares cheaply. For many companies, a sharp decline in their stock price means bankruptcy.

But from the point of view of society as a whole, a stock market crisis? this is only a return to a level reflecting the real state of affairs in the economy. A stock market crash usually gives impetus to the coordination of all economic policies of the state. As a result of the crisis, the temporary relative correspondence of the processes occurring in the real economy and in the sphere of capital formation is restored. No matter how strange it may seem, in this regard, stock exchange crises, destroying the “excess” of financial capital, perform a constructive function. Exchange crises accelerate the development of the joint-stock form of ownership, increase the concentration in the hands of financial capital of an increasingly large part of securities, intensify the competition between shareholders “for survival,” and lead to bankruptcies of enterprises and banks.

However, one cannot help but see that, despite all their undeniable negative consequences, crises are a prerequisite for subsequent economic recovery. Exchange crises, for example, lead to the replacement of backward corporations by advanced, more competitive ones, bring down the rushed demand for securities, remove overly risk-prone players from the securities market, and force them to look for and implement new forms and methods of organizing the activities of the exchange.

For small shareholders, stock market crises certainly pose a formidable danger. But abandoning the stock exchange on the grounds that it is inseparable from speculation and crises would deprive the economic mechanism of a flexible and efficient system of capital formation, making the investment process extremely difficult. The presence of a securities market contributes to the capitalization of the income of members of society, significantly increasing the investment resources of the national economy. At the same time, which is very important, there is a real decentralization of the investment process, giving it the flexibility and dynamism necessary for restructuring the investment structure.

Finally, the securities market is capable of diverting a significant portion of the population's cash income, thereby reducing the demand for goods and services. This circumstance, which has a very ambiguous effect on the course of reproduction in developed capitalist countries, can have an important positive meaning in conditions of a deficit economy.

The importance of the stock exchange for a market economy extends beyond the organized securities market. Stock exchanges have revolutionized the issue of capital liquidity. The “miracle” was that for the investor the differences between long-term and short-term investments were practically erased. Fears of the death of capital, which were quite real in time, restrained entrepreneurial fervor. But as operations on the stock exchanges have developed, a situation has arisen where for each individual shareholder, investments are almost as liquid as cash, since shares can be sold on the exchange at any time.

In addition to unified services for transactions with securities, stock exchanges today play an important information role, providing holders and potential buyers of shares with both operational information (Jow Jones indices (USA), Nikkei index (Japan), MICEX consolidated stock index (Russia)), and detailed analytical reports, which also contain a forecast of the securities market conditions. However, despite the availability of information and the wide range of consulting services provided, it turns out to be extremely difficult to predict the dynamics of current market prices (rates) of specific corporations: the number of factors, including non-economic ones, influencing them is too large.

Thus, at this stage, more and more attention is paid to securities and the stock market. With the development of a market economy, these concepts are increasingly entering our lives. At this stage, Russia is forced to turn to the experience of the West, but, nevertheless, our stock market cannot be called an exact copy of the Western one. Russia? a special country, and, of course, any innovations and innovations are adjusted and adapted to our reality.

It should be noted that at this stage there is an active process of establishing the normal functioning of the stock market and its development, although a certain instability in the political and economic life of society still affects it. I would like to believe that in the near future a civilized stock market will finally be formed in Russia.

The term "speculation" comes from the Latin word "speculatio", which means stalking, looking out. In the modern dictionary of foreign words, the term speculation is defined as:

1) Purchase and resale of various goods at increased prices with the goal of profit.

2) Purchase - sale of exchange-traded assets (shares, bonds, bills, etc.) with the goal of obtaining speculative profit from the difference from the difference between the purchase and sale prices (rate) when reselling these assets.

3) A calculation based on something, an intention aimed at using something for selfish purposes.

In economics, the concept of speculation is defined as making a profit by using price differences over time.

Speculators are the largest but least successful group of participants in the futures market. Although there are no official statistics on the successes and failures of speculators in the futures markets, however, some expert assessments have been made. According to these estimates, only 10 to 30% of the total number of speculators had a net profit in each year of their activity. But this does not prevent new groups of futures market participants from trying their hand at speculative operations.

The subject of speculative transactions is the trading of the deferred right to make and accept delivery under a contract in order to extract a “price difference” in connection with changing business conditions. Speculators, unlike hedgers who seek to protect transactions from risk, take risks in an effort to obtain a certain profit.

In market conditions, speculation is an integral element of purchase and sale transactions, since regardless of the will and desire of the parties, one of them, as a result of continuous price changes, ultimately receives additional gains, while the other incurs losses.

Exchange speculation is usually carried out by members of the exchange and those who wish (usually private individuals) to play on the difference in the price dynamics of futures contracts, but large corporations and banks can also participate in speculation, acting through the same speculators.

In practice, there is no strict distinction between entities engaged in hedging and entities whose activities are related to exchange speculation, since participants in the real goods market are also engaged in exchange speculation, because in a market economy the main thing is to make a profit, regardless of through what exchange transactions this goal is achieved.

In textbooks on stock trading stock speculators the following functions are defined:

§ Increasing market liquidity;

§ Relative smoothing of price fluctuations.

§ Taking part of the risk of investors or hedgers depending on the market;

§ Competition.

There are two main types of speculators in futures markets: short sellers and long sellers.

Bearing is carried out by speculators selling futures contracts with the aim of subsequently buying them back at a lower price. Speculators who engage in these transactions are called "bears."

The bullish game is carried out by purchasing futures contracts with the aim of subsequently selling them at a higher price. Speculators of this type are called "bulls".

Speculative profit is possible both when playing for an increase and when playing for a decrease. At the same time, in speculative operations losses are also possible, often quite significant. A speculator usually carries out short-term operations. When he starts an operation, they say: he opens a position, when he closes, he closes the position. If a speculator buys securities, he opens a long position, if he sells, he opens a short position. (6)

Stock speculation, as a rule, is carefully planned and carried out according to pre-prepared scenarios, through careful preliminary measures, stretched over quite long periods. Moreover, the excitement on the stock exchange is not necessarily organized by large stockbrokers. This role is usually assigned to small and medium-sized investors, who essentially prepare the ground for large-scale stock market speculation. But, as a rule, large corporations, banks, primarily investment banks, and other financial institutions already participate in them. An increase in interest in general in certain securities or in shares and bonds of a certain company may be due to information about a merger with a larger partner, upcoming scientific and technical discoveries in a particular company, false information about business negotiations between companies on various issues ( on the distribution of government orders for large sums). The dissemination of such information can ultimately give a powerful impetus to an increase in the exchange rate, which may seem unpredictable. In this case, it is important to carry out a transaction a few minutes before the end of the exchange, since the established rate becomes decisive for the next day or two.(8)

On the modern stock exchange, not only stocks, but also bonds of private companies and corporations have become the object of stock speculation. They are used for all kinds of fraud and fraud to make speculative profits. For the purpose of speculation in bonds, special companies are created that build their business on fluctuations in interest rates. Commercial banks play a huge role in the organization and financing of such shell companies, which make additional profits in transactions related to the provision of bonds on credit. Together with banks, other credit and financial institutions with solid financial resources also participate. In this regard, insurance companies have a special place. When transacting in securities, market participants can conduct real, speculative or arbitrage transactions. Stock speculation is a phenomenon as old as the stock exchange itself. Before explaining why speculators are attracted to the stock market, we should briefly discuss why people speculate. There are two main motives in speculation: the possibility of profit and pleasure. Every speculator will agree with the first motive, but the second is often of greater importance. Some people like risk, and stock speculation is risky by definition.

The psychological motives of speculators do not differ significantly from the motives of gamblers. However, stock speculation does transfer risk from those who do not want it to those who do. In other words, speculation in financial assets directs the desire to take risk in an economically productive direction.

Stock trading has great appeal for those who are interested in a combination of excitement and the possibility of big, quick profits. First, it represents extraordinary profit opportunities. Secondly, stock trading is technically simple. You just need to call your account executor and within a few minutes your order will be executed. There are thousands of brokerage houses and many brokers ready to assist clients in their trading. Thirdly, stock transactions stimulate intellectual activity; they make it possible to analyze the market and anticipate its changes. (11) Exchange markets themselves are interesting and informative. One of the first things speculators discover is that very few events in the world do not affect stock or currency prices. Stock speculation makes those who just want to make a profit more aware of the world in which they live.

Most speculators are attracted by the hope of quick profits rather than concern for the welfare of the economy, however, they perform several vital functions in the stock markets that facilitate trading in stocks and financial instruments.

The presence of a large group of speculators in stock markets benefits both the stock exchange and the economy as a whole. The main functions that stock speculators took on: increasing market liquidity, relative smoothing of price fluctuations.

Increasing market liquidity. Speculators are an important source of market liquidity. The constant influx of orders from stock speculators into the trading floor can significantly reduce the time for counter orders to buy and sell to appear. In a liquid market with a large number of buyers and sellers, transactions can be carried out on any scale with little change in prices. At the same time, the arrival of speculators, increasing the number of participants in operations, promotes competition, and ultimately more effective identification of an objective exchange rate. Relative smoothing of price fluctuations. The activities of stock speculators contribute to the relative stability of the market and generally eliminate price fluctuations, since the operations of speculators are often directed against the market, that is, against the main price trend at the moment. By purchasing assets at low prices, speculators help increase demand, which leads to higher prices. Speculators selling assets at high prices reduces demand and therefore prices.

Regulation of the exchange market or exchange activities is the streamlining of the work of its participants and transactions between them by organizations authorized by society for these actions. An exchange can have both external and internal regulation. Internal regulation is the subordination of its activities to its own regulatory documents: the Charter, Rules and other internal regulatory documents that determine the activities of this exchange as a whole, its divisions and employees. External regulation is the subordination of the exchange's activities to regulations of the state, other organizations, and international agreements.
Regulation of exchange activities is carried out by bodies or organizations authorized to perform regulatory functions. From these positions they distinguish:

State regulation of exchange activities, which is carried out by government bodies whose competence includes performing certain regulatory functions;

Regulation by professional participants in the securities market, or self-regulation of the market. There are two possible options here. On the one hand, the state can delegate part of its market regulation functions to authorized or selected organizations of professional participants in the exchange market. On the other hand, the latter can themselves agree that the organization they created receives from themselves certain regulatory rights in relation to all founders or participants of a given exchange or all exchanges;

Public regulation or regulation through public opinion; Ultimately, it is the reaction of broad sections of society as a whole to some actions on the stock market that is the primary reason why certain regulatory actions of the state or market professionals begin.

Regulation of the exchange market has the following goals:

Maintaining order in the exchange market, creating normal working conditions for all market participants;

Protection of market participants from dishonesty and fraud of individuals or organizations, from criminal organizations and criminals in general;

Ensuring a free and open process of exchange pricing based on the concentration of supply and demand;

Creating an efficient market where there are always incentives for entrepreneurial activity and every risk is adequately rewarded;

Creation of new exchange markets, support of exchange structures, initiatives and innovations, etc.; influencing the stock market in order to achieve some social goals (For example, lowering stock prices).

The regulation process in the exchange market includes:

Creation of a regulatory framework for its functioning, i.e. development of laws, regulations, instructions, rules, methodological provisions and other regulations that place the functioning of the market on a generally recognized and respected basis;

Selection of professional participants in the exchange market; a modern exchange market is impossible without professional intermediaries, who must meet certain requirements for knowledge, experience and capital established by authorized regulatory organizations or bodies;

Monitoring compliance by all market participants with the norms and rules of market functioning; this control is carried out by the relevant control bodies;

A system of sanctions for deviations from the norms and rules established on the exchange; such sanctions may be: oral and written warnings, fines, criminal penalties, exclusion from members of the exchange.

The principles of regulation of the exchange market reflect time-tested global practice of the exchange market.

The main principles mentioned are:

Separation of approaches to regulation in relation to over-the-counter market participants, on the one hand, and to professional participants of the exchange market, on the other.

The maximum possible disclosure of information about everything that is done on the stock market. This ensures not only the opportunity for market participants to obtain information necessary for making business decisions, but also increases the degree of trust in the exchange and its members;

Ensuring competition as a mechanism for objectively improving the quality of services and reducing their costs;

Preventing the combination of rule-making and rule-enforcement in one management or regulatory body;

Ensuring transparency of rule-making, public discussion of market problems;

Principles of continuity of world experience with the Russian system of regulation of the exchange market;

Optimal distribution of functions for regulating exchange activities between state and non-state governing bodies.

The system of state regulation of the exchange market includes:

State and other regulations;

State regulatory and control bodies.

Forms of government market management, which include:

direct, or administrative, control;

indirect, or economic, control.

Direct, or administrative, control is carried out by:

Adoption by the state of relevant legislative acts;

Registration of market participants;

Licensing of professional activities on the exchange market;

Ensuring transparency and equal awareness of all market participants;

Maintaining law and order in the market.

Indirect, or economic, management of the exchange market is carried out by the state through the economic levers and capital at its disposal:

Taxation system (tax rates, benefits and exemptions);

Monetary policy (interest rates, minimum wage, etc.);

State capital (state budget, extra-budgetary funds of financial resources, etc.);

State property and resources (state-owned enterprises, natural resources and lands).

The main government bodies directly regulating exchange activities:

Federal Securities and Exchange Commission;

Federal Commodity Exchange Commission;

Ministry of Finance of the Russian Federation;

Central Bank of the Russian Federation.

The Federal Securities and Exchange Commission directly regulates the activities of stock exchanges. The Federal Commodity Exchange Commission regulates commodity exchanges and futures trading. The Central Bank regulates the activities of currency exchanges.

The Ministry of Finance sets accounting rules, issues government securities and regulates their circulation on stock exchanges.

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