London International Financial Futures Exchange (LMB)
London International Futures Exchange was established in 1982; it was the first exchange of financial futures, which is not in the US. Among 215 members of LMB are representatives of financial institutions, industrial groups, as well as individuals - experienced traders who trade at their own expense. This exchange is a typical international stock exchange: about 30% of its members are British firms, in the mid-1990s. approximately 20% accounted for European, American and Japanese firms. Currently, the share of Western European firms has increased, Japanese significantly decreased, and the American remained at the original level. In 1998, an average of about 850,000 contracts were sold on the exchange daily, while the volume of trade at the beginning of the current decade increased by about 50% annually.
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The main method of trading on the stock exchange is the execution of transactions between traders and market makers in special "exchange pits" by trading "with a voice & quot; and using standard hand signals. Each & quot; pit & quot; there is a representative of the exchange, which monitors the order and performs the role of arbitrator in the event of disputes. In option trading, market makers also take part, assuming the responsibility to constantly monitor the options for which they are responsible. For these options they can not act as brokers, i.e. work on a commission basis, there are no other prohibitions on options. Other participants can make transactions as brokers, dealers, independently quote options.
All transactions are settled through the London Clearinghouse ( LCP), which allows the participants to withdraw from the game by concluding the opposite contract without real delivery and paying the full amount for purchased financial instruments, i. the participant in the transaction is always able to close his long or short position.
International stock exchange organizations that regulate exchange activities
These include international organizations and associations, the main of which are:
• International Federation of Stock Exchanges (FIBV). It coordinates and develops common standards. Members of the federation account for a total of 98% of all world capitalized financial resources;
• International Organization of Securities Commissions (IOSCO). Its members are the relevant (regulatory) authorities of the countries participating in the stock markets. This organization also works out opportunities to improve work on the basis of coordination, cooperation and learning from mutual experience;
• The International Securities Market Association (ISMA). This association is practically the only organization regulating the international market of Eurobonds; it consists of professional participants, primarily the largest transnational banks;
• The International Association of Futures Markets (Futures Industry Association - FIA). This organization also plays an important role in regulating exchange activities in relevant national, regional and global markets.
Speaking about regulation, it should be remembered that the activities of international organizations are mostly advisory or advisory in nature. For example, they prepare comprehensive reports on the current activity of exchanges, develop international standards, conduct theoretical studies. The growing role of international exchanges is evidenced by the emergence of such a trend as a relative decrease in the influence of national regulators, especially the role of government bodies, although this decline is not the "withdrawal of the state" from the sphere of financial regulation. Rather, it deals with new forms of regulation and optimization of state functions, reducing its direct forms of influence towards the universalization of indirect forms of regulation, with emphasis on strengthening elements of supranational and global regulation.
In order to quickly assess and predict the dynamics of stock prices and ease of use of data on the securities market with a large number of issuers, generalizing indicators of price movements on stock exchanges that are called stock indexes are widely used. For example, on the New York Stock Exchange, more than 5,000 securities are traded, more than 4,000 national joint stock companies are traded on the London Stock Exchange, more than 3,000 national companies in Tokyo, more than 2,500 companies in the Frankfurt Stock Exchange.
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The index reflects the mixed rate of a certain number of shares, at the same time it shows the state of the economy. If there is a stable growth trend of the index, it means that the country's economy is on the rise, if the index is giving is a sign of unfavorable trends in the economy or in some of its sectors. Indices show the average value of the exchange value of shares of certain companies, which most accurately reflect the current situation on the market.
The oldest, most authoritative and widespread stock index is the Dow Jones Index - DJI. It reflects the stock prices of the New York Stock Exchange. There are several types of this index. The Dow Jones Industrial Average is calculated as a simple average of 30 major industrial companies whose shares are quoted on the New York Stock Exchange (20% of the market value of securities). This index is an indicator of market activity, and its components may vary depending on the positions of the largest corporations in the US economy and in their markets. The index is calculated by adding the prices of shares included in the listing of companies at the time of closing the stock exchange and dividing the amount received by the number of shares traded on the market. The Dow Jones Transport Index characterizes the movement of stock prices for 20 transport companies (aviation, rail and road). The Dow Jones Utility Index is calculated on the basis of 15 gas and electricity supply companies. The composite Dow Jones index is determined on the basis of industrial, transport and communal indices of 65 companies (30 + 20 + 15). Usually, shareholders on world and regional exchanges are closely watching the movement of the Dow Jones indicator, since all other indices are oriented toward it.
The fastest growing index of the electronic stock exchange NASDAQ, about it, we mentioned above. The stock index of the newspaper "Financial Times" ( FT-SE 100) is the price index of the 100 most important shares quoted on the London Stock Exchange. The index was introduced in 1984 with a base of 1000, as it became apparent that the stock index of ordinary shares in industrial enterprises had shifted too much towards manufacturing companies.
Now this index, published by the newspaper "Financial Times", is the most widely cited index of stock prices.
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