Summary
Summary Chapter 5 notes: Trading of securities on the JSE
- Course
- Institution
In depth notes of Chapter 5. Linked back to slides, textbook and extra material.
[Show more]
Seller
Follow
juliayates19
Reviews received
Content preview
CHAPTER 5 : TRADING OF SECURITIES ON THE JSEPHASES OF THE JSE AUCTION PROCESS: >
call phase ; Random end ; price determination period
1) CALL PHASE
↳ Order books = frozen & all
trading stops
> All orders from market = collected
>
Enter new orders ( no execution constraints )
>
Existing orders could be adapted removed
> NO
trading takes place during this phase .
s order book is
continuously updated
> ( 08:30 09 00 ) 30
opening
call :
phases auction mins
>
( 16:50 17 00 ) 10 mins
Closing auction
>
auction ( 12:00 12 15 ) 15
lntraday mins
2) RANDOM END :
> call phase ends with a random period of 0 to 30 seconds
Impossible to new orders orders
exchange existing
>
enter
for ( manipulation )
1 Makes any attempt spoofing more difficult
3) PRICE DETERMINATION PERIOD
> Principles for determining the auction price ( specific order )
-
Maximum execution principle :
'
price that will the highest executable
create
trading volume
2- Minimum surplus :
'
the price that will result in the smallest surplus
3. Market pressure of the surplus :
side
I
Buy : Take the highest price
'
sell Side : Take the lowest price .
::
, TRADING IN AN OPEN OUCTRY MARKET:
open outery market:(1857 1996)
·
Market participants (e.g. brokers) pathered at specific location
called out of shares
·
the name the
company in which
they wanted to
buy sell
·
Within 7 business days: share certificate and signed transfer forms
3
DISADVANTAGES:
Limited no of shares could be traded on a
daily basis.
Misunderstandings amongst brokers
Hand signals used to communicate
ELECTRONIC TRADING
·
1998: JET SYSTEM (Tohannesburg Equitles Trading System
Continuous screen
trading
·
Computer
·
program connects executable requests.
·passive orders on order books.
&2001: JSE SETS: (stock system (
exchange trading
·
Based London
on
Trading system
Two ways of trading:
·
1. Continuous
trading throughout the
day (similar to (JET)
2. Auctions at certain times of the
day (begs, end of day to ensure fair opening? Closing prices
determined).
&
2007: TSE TRADELECT SYSTEM:
platform was based London.
Trading In
·
·
Considerable Increase in
trading volumes.
2013: MILLENNIUM EXCHANGE:
·
Trading platform moves to
Johannesburg
400 faster Tradelect
Trading times than the
·
Increased market (more shares bought/cold during day)
·
Liquidity can be
3
·
Auctions: lunch-time, late afternoon
morning,
Rest of the
&
day trading takes place on a continuous basis.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller juliayates19. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $4.24. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
79223 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now