Cash Operation

This is the most usual way of negotiating in the market. In cash operations, liquidation is done the same day or a few days later, according to the kind of chosen securities. Therefore, in cash operations, the delivery of securities from the buyer and the payment of the same by the buyer s done immediately after the negotiation.

In spite the fact that in theory after the negotiation the seller has to give the securities to the buyer, in practice, securities to the buyer, in practice, securities are usually steadfast to avoid troubles that may occur due to the great amount of negotiations.In most markets the so called “liquidation systems of market operations and the deposit of underlying values is used. This system is based on the functions of securities; that is to say, the possibility of replacement among all the securities of a same class and kind. With that, all the paperwork of stock market negotiations are simplified since they do not have to make reference to specific numbers.

The functionality of the system consists on noting in the savings entities accounts assigned in liquidation (societies and value agencies, banks and safe & loans) of the operations carried out, payment of buying and charged to sales for each kind of security admitted in the system. The advantages of the system are:

Simplification of the liquidation process, since they do not have to repeatedly register the numbers of securities.        

Less manipulation of securities, since the delivery is exchanged for the registration in the account and a periodical compensation of balances among the depositing entities

Costs reduction of issuance and maintenance, since securities can replace unitary securities for sheets of multiple securities or even dematerializing securities substituting control of physical documents for computing control.