June 7, 2017

The main types of exchanges

The development of the exchange business, in today’s time, moved forward in terms of its activities and forms of trade. Undoubtedly, the main function of the major exchanges is customer service.

There are a number of basic kind of exchanges that specialize in particular tradable instrument:

  1. Commodity Exchange (Commodity) – is engaged in wholesale trade in bulk commodities. It is divided in turn: Universal Exchange – here comes the purchase and sale of various types of goods and specialized exchange – purchase and sale of a particular type of product, for example, only the metal.
  2. Currency Exchange – place of purchase sales operations, currency investing.
  3. Stock Exchange – are carried out transactions in securities, such as stocks, bonds, various certificates.
  4. Job center – an organization dedicated to buying and selling of labor, mediating between the employer and the workers, so-called employment centers.

Another interesting view of the major exchanges Futures Exchange – here are traded in futures contracts, which involve the supply of goods or securities in the future. Futures contract – a business contract for the supply of a certain amount, a certain commodity at a fixed price within a specified in the contract or contract of insurance against price risks. In all cases, the obligations on futures contracts carried out in the form of payment of the price difference rather than by delivery of real goods. For example: you sell an ounce of gold today at the price of $ 1500.1 – a “paper agreement” to the buyer. Naturally, no items you do not deliver, after two weeks (for example) the price per ounce increased to $ 1545.5, thus the buyer resells the goods back to the seller, receiving the difference. This effect can be reversed depends on the market. Whatever may be at a loss, both parties can conclude the so-called “fear of the contract”, which exhibit the approximate position of growth or decline in value.

An integral element of the exchange is the speculation – trade, aimed at earning funds on how to change the market price. Speculators, depending on the type of activities referred to bulls or bears. Bull – a player who believes in its business statistics, that prices will rise, begins to work on the preservation of buying or have bought contracts to play only on the rise. Bear, on the contrary, believes that prices will fall, therefore, begins to sell their contracts.

These transactions include hedging, hedge – insurance against possible risks or futures contracts that we reviewed just above, on insurance of risks.

Due to the constant development of the basic form of exchanges of interpretation and classification may change, most likely, it’s a reflection of their existence in the market place.

Leave a Reply

Your email address will not be published. Required fields are marked *