An organized securities market is an integral economic system that generates supply and demand for them. Securities are issued in the form of forms, various certificates. They can be used by owners for settlements, and as collateral. Securities may be registered or bearer.
Participants in the exchange market are investment institutions, issuers and investors. The stock exchange market in its essence is part of the general financial market, with the help of which the rapid activation of investments in various economic sectors is carried out.
The structure of the securities market contains the following elements in itself: subjects; market (stock and over-the-counter); regulatory authorities; individual organizations and their own infrastructure. The structure of the securities market is complex and multifaceted, has many different characteristics. Therefore, in order to evaluate it correctly, it is necessary to consider each of its elements in detail. Let's start with the subjects of the securities market.
Market entities include investors, issuers, and professional institutions. In turn, the securities market of the Central Bank is divided into: primary market and secondary. The primary private market places securities of the first and repeated issues among individual investors in strictly limited quantities. The primary public market places securities available to all investors in an unlimited amount. The secondary market is also divided into two categories - over-the-counter and exchange-based markets. The stock market sells securities of large companies that meet market standards (they have a large number of shares in circulation, which are provided with a degree of reliability). The OTC market works with other investors - large companies whose turnover and size are somewhat below the established requirements of the exchange market. Moreover, the OTC market is characterized by a very high level of liquidity of various stocks. In some countries, OTC market volumes are sometimes equal and significantly outstrip the volume of exchange markets (New York and Russian Stock Exchanges). Government securities are also sold through the OTC market.
The structure of the securities market within itself or otherwise in its own infrastructure contains the following departments. This is the legal department, information, depository, settlement and clearing and registration. Moreover, all these departments, which have different directions, solve the general problems of the market. And this is, first of all, the general organization of the trading process, the formation of a price rate, providing all bidders with the necessary information, lending to the state, ensuring the level of liquidity, etc.
The structure of the securities market also has different types of stock exchanges. For example, these are public stock exchanges, private and mixed.
At the same time, the very process of organizing trade in any valuable assets on them, the methods and mechanisms used for conducting tenders differ little. It all depends on the degree of development of the stock market, the number of securities, as well as the number of orders for their sale or purchase, and changes in price dynamics. The following trading methods are mainly used. This is a simple auction and a double. In turn, simple tenders can be organized in the form of an auction by the seller, buyer or in absentia. The seller’s auction is based on the increase in the price of a security during the bidding process. At the core of a buyer's auction is the opposite. There is a decline in the price of a security during the bidding process. The basis of trading at an absentee auction is a limited number of valuable assets (securities) with an approved price threshold, which will only be sold in a strictly defined time period. After its completion, the seller considers all available applications and sells securities at the price offered by the buyer above the threshold level or possibly equal to it.