Ways to Operate at the Stock Exchange



Cash Operations
It usually is the most common part of the volume contracted at the markets proceeds from it.

The most fundamental characteristics of this type of operations are their terms for liquidation. This is done the same day or a few days later from the closing of the operation, depending on the type of asset involved.

So then, in cash operations the delivery of securities from the seller and the payment of the same by the investor are done immediately after the contracting.

Remember that the phases of any stock exchange market operations are: negotiation, contracting and liquidation.

When talking about the delivery of securities from part of the sellers after the contracting phase, doesn’t generally imply, the physical delivery of the same.

The securities are usually immobilized with the finality of simplifying   the process of liquidation, that is, that the possibility of substitution among all the securities of the same type is given, without having to make reference to concrete numerations.

The system of annotation on account of the depositary institutions assigned is used at the liquidation of operations done.

Terms Operations
This type of operations is characterized for the delivery of the corrective entry counterpart after closing the operation. So then, they are done when you contract securities without paying at the moment in cash but at a term agreed before hand.

There are two types of term operations:

  • The Latin or French system: it consists in term operations in which the contractors can differ in the fulfillment of their obligations.
  • The North American “margin” system: that consist in cash operations in which the agents lend money to the buyers or shares immediately after the contracting and the second its money.