A stock exchange is the exchange of a security in the stock market. Said exchange takes place between the offeror and the demander with the agreed conditions.
Trading on the stock market plays a fundamental role in the stock market. It happens when an offeror and a claimant agree on the exchange of a certain title. The conditions under which said sale is carried out and the title exchanged, determine the type of stock exchange.
We can find a multitude of assets to exchange in the stock markets. In this way, the investor who carries out a stock exchange expects to obtain a certain return. It can come from the distribution of dividends or from the sale of the title.
Types of stock market operations
In the stock markets, a multitude of stock transactions can be carried out depending on each type of asset. Here are some of the most important:
- Term: The payment of this operation is not made at the time of the exchange but in a specified period.
- Cash: It is that operation in which the payment is made at the same time of delivery.
- Repo: It consists of the purchase or sale of a certain security with the agreement to repurchase or resell them after a certain period.
- Simultaneous: The simultaneous operation is one in which a fixed income security is bought or sold with the agreement to buy it back or sell it in the short term.
- Swap: It is part of the family of financial derivatives and is carried out when two parties exchange two financial flows during a certain period of time. They can be income and payments in the same or a different currency.
- Futures: A purchase or sale for the future is agreed in the present. The conditions of the operation are set when the agreement is reached and are executed when the exchange takes place.
- OPA: In it, the intention to purchase the shares of a listed company at a certain price is publicly proposed.
Stock trading example
Suppose we are on the board of directors of a publicly traded company. Due to certain circumstances we are forced to carry out a capital increase to obtain liquidity.
We carry out the issuance of shares and their subsequent sale. In this way, let's talk about completing a stock exchange operation.
In conclusion, a stock exchange operation consists of the exchange of securities in the stock market under agreed conditions.
Tags: Business markets derivatives