The Central Bank market has formed in Russia. It is regulated by legal and economic methods. The legal side is regulated by the Civil Code of the Russian Federation, which establishes the rules of work and the required forms of doing this type of business, mandatory details, and reporting forms. The ability to transfer business rights can only be done if the required documentation is available. But a loss on the exchange rate of securities is possible under any legislative framework.
There are two forms of their release:
- securities issued by the Central Bank may be undocumented, determined by the following criteria: a) property and non-property rights are certified in accordance with applicable law, b) are realized at the same time and in the same issue; the time of purchase does not matter, c) the placement takes place on the issues.
- Central Banks are non-commissioned, issued in small series or individually.
The Central Bank by right of ownership is divided into order, registered and bearer;
- an order of the Central Bank, in which the affiliation is indicated in it itself;
- the registered securities in which the name of the owner is entered on the form or in the register. It happens in written and electronic form;
- Bearer securities, does not indicate the buyer and does not require identification. No registry is maintained for them.
Nowadays, many make a pledge of securities. Valuation will be made below market value, therefore, a course loss may occur. Working with the Central Bank is unsafe; various risks arise. For instance:
- with a decrease in the Central Bank's liquidity, there is a likelihood of a decrease in their value upon subsequent sale, in some cases, the sale is much lower than the cost;
- in case of bankruptcy of the issuer;
- If the market conditions worsen, securities will become cheaper.
If there is a loss on the exchange rate of securities, try to keep it to a minimum.
The opportunity to lose investment in the stock market was called "portfolio risk." Loss on the exchange rate of securities is quite likely, this can happen due to circumstances beyond your control.
There are such types of securities market:
1. Primary, where only issued securities are sold.
2. Secondary, where securities are already resold, it is more speculative.
Exchange rate fluctuations of the Central Bank in the stock market occur constantly. If their value grows, the number of sales decreases, and when the price decreases, it increases. The course of the Central Bank is influenced by many factors;
- speculative, when shareholders themselves buy their shares, thereby increasing their value;
- objective, depend on the state of finance of the owner of the shares, the current profit of the company, the value and number of shares, the rate of increase in the liquidity of the joint-stock company;
- subjective, they should include the technical component of trade, as well as the number of securities on the market.
The degree of risk from investing funds, liquidity and profitability are the most important components that should be considered when working in this market.
You should always remember that a loss in the exchange rate of securities can occur at any time. Take a balanced and reasonable approach to every action. Carefully analyze the market situation. Define your investment portfolio correctly . Skillful trading in the securities market can increase wealth.