Bull vs Bear

Bull vs Bear

Bull vs Bear

The term “bull” and “bear” represents the market conditions. They describe how the stock market is performing. The bull market represents the continuous rise in the price of security or asset. The bear market represents the fall in prices of the underlying security or asset. As an investor, it is important to understand the market conditions. As a wrong decision will impact the portfolio. Over a long period of time, the market has displayed positive returns. This determines that the majority of investors were bullish. (more…)
Auction Market

Auction Market

Auction Market

A market in which buyers indicate the highest price they are willing to pay and sellers indicate the lowest price they are willing to accept is known as the auction market. Basically, it is a security exchange in which buyers make a bid and sellers make an offer in order to make it. In simple terms, an auction market is a place where buyers and sellers make competitive bids simultaneously. (more…)

Order Flow

What is Order Flow 

Trade Order means various types of orders which can be placed on stock exchanges for financial assets like stocks and futures contracts. It consists of instructions to a broker/brokerage firm to purchase a financial asset on behalf of investors. Execution of order goes through series of sequential steps before the completion of a transaction. Order flow analysis helps in recognizing the final details of buying and selling volume. Order flow analysis helps in predicting with a good amount of certainty where order imbalance awaits at a future price level. (more…)
Volatility Swap

Volatility Swap

Volatility Swap

What is Swap? A Swap is an exchange of any financial instrument between two parties. It is a derivative contract. Swaps are traded only in the OTC markets and not on exchange and so are customizable. The most common swaps are interest rate swaps and currency swaps. The exchange takes place only at a predetermined time or as mentioned in the contract. (more…)
circuit breaker

Circuit Breaker

Circuit Breaker

A circuit breaker is a safety feature that prevents significant price fluctuations in a short period of time. When the price changes above or below the cap, trading on the market is stopped. Circuit Breakers are placed to curb panic-selling. They are used in broad market indexes, such as the S&P 500. They are also used for individual securities. (more…)
Open Outcry System

Open Outcry System

Open Outcry System

The open outcry system also called pit trading is the system of trading that formed the basis for the exchange-based transaction that was traded in physical locations like a pit or other arenas. Although it may appear very chaotic, it’s the original way of matching traders and can be commonly seen in financial movies. It was popular before 2010 as a common trading method used for communication between professionals on a stock exchange or futures exchanges where traders used verbal and non-verbal signals to communicate with each other. (more…)
Exchange-Traded Derivatives

Exchange-Traded Derivatives

Exchange-Traded Derivatives

Derivatives refer to the financial instruments which derive their value from the underlying assets, security, index, or commodity, traded on organized exchanges or in the over-the-counter markets.  It is a contract between a buyer and a seller concerning an agreement to be fulfilled at a specific point in time. That being said, as Exchanges migrate towards fully electronic structures, there is far less differentiation between Exchange-Traded and OTC markets.

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Dual Listing

Dual Listing

Dual Listing

In order to increase overseas investor exposure in an expanding global financial market, often firms that are listed in their local markets also pursue a dual listing in the overseas market. This new listing may introduce an investor base to the firm which is significantly higher and therefore more familiar with the business segment of the company than its domestic market. (more…)
Order Driven market

Order Driven Market

Order Driven Market

Order driven market consists of a constant flow of buy and sell orders from market participants. There are no designated liquidity providers but are more transparent than the quote-driven market. By comparison, in quote driven market, designated market makers provide bids and offer that other market participant may trade on. Stock exchanges like the New York Stock Exchange and the Nasdaq are seen as hybrid markets—a combination of both order and quote driven markets. (more…)
Direct Market Access

Direct Market Access

Direct Direct Market Access

The essence of the exchange is its Electronic Systems, a mechanism that compares a purchase order and a sell order against a bid and ask price to establish a trade. Electronic systems are used to different extents for trading in financial markets, varying among markets, across forms of transactions and clients, and between the different phases of the trade process. Presently traders trade securities by placing the order directly on stock exchange order books and electronic communications network brokers (ECNs) via Direct Market Access (DMA trading). DMA encourages traders to become market makers instead of price makers. (more…)