Eq2_Lecture - NYSE annual turnover Week 3: Equities 2:...

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Week 3: Equities 2: Secondary Markets Secondary Markets Types of markets and orders Interpreting stock tables SGX settlement process Margin trading/Short selling Rights issues (next week) 2/21 Roger Loh NYSE annual turnover 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2008, 139% 0% 20% 40% 60% 80% 100% 120% 140% Year NYSE Annual Turnover Source: nyxdata.com 3/21 Roger Loh Types of Markets ± Intermediary { Broker { Dealer ± Types of Markets { Stock exchange { Over-the-counter (OTC) { ECNs 4/21 Roger Loh Eg of OTC traded stock: Lehman
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5/21 Roger Loh Trading Orders ± Which security; Buy or Sell; no of shares; type of order; time limit? { Market order { Limit Order { Stop Order ± Program trading { Rule based trading constitutes a third of trading volume on NYSE Secondary Markets in Singapore Interpreting Stock Quotations (handout) Settlement Cycle Margin Trading Short Selling 7/21 Roger Loh Key Terms ± Singapore Exchange (SGX) ± Central Limit Order Book (CLOB) ± Central Depository (CDP) – scripless system introduced in 1993 which removed the need for actual share certificates. 8/21 Roger Loh Central Limit Order book ± CLOB system maintains an order book for every traded security and matches buy and sell orders ± Each order in the book has a limit price – highest buy order, and lowest sell order. ± Price priority, then time priority ± At the end of a trading day, all unmatched orders lapse automatically
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9/21 Roger Loh Tick Size on SGX Share Price Minimum Bid Size Up to $1.00 0.5 cent Up to $10.00 1 cent Above $10.00 2 cents As of Jan 2008, replaces old schedule
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This note was uploaded on 06/06/2009 for the course SOB FNCE102 taught by Professor Rogerloh during the Spring '09 term at Singapore Management.

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Eq2_Lecture - NYSE annual turnover Week 3: Equities 2:...

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