A capital market is a financial market in which long-term debt or equity-backed securities are bought and sold. Capital markets channel the wealth of savers to those who can put it to long-term productive use, such as companies or governments making long-term investments. Financial regulators like the Bank of England and the U. S. Securities and Exchange Commission oversee capital markets to protect investors against fraud, among other duties. Modern capital markets are invariably hosted on computer-based electronic trading platforms; as an example, in the United States, any American citizen with an internet connection can create an account with TreasuryDirect and use it to buy bonds in the primary market, though sales to individuals form only a tiny fraction of the total volume of bonds sold. Various private companies provide browser-based platforms that allow individuals to buy shares and sometimes bonds in the secondary markets. There are many thousands of such systems, most serving only small parts of the overall capital markets.
Entities hosting the systems include stock exchanges, investment banks, government departments. Physically, the systems are hosted all over the world, though they tend to be concentrated in financial centres like London, New York, Hong Kong. A capital market can be either a secondary market. In primary market, new stock or bond issues are sold to investors via a mechanism known as underwriting; the main entities seeking to raise long-term funds on the primary capital markets are governments and business enterprises. Governments issue only bonds, whereas companies issue both equity and bonds; the main entities purchasing the bonds or stock include pension funds, hedge funds, sovereign wealth funds, less wealthy individuals and investment banks trading on their own behalf. In the secondary market, existing securities are sold and bought among investors or traders on an exchange, over-the-counter, or elsewhere; the existence of secondary markets increases the willingness of investors in primary markets, as they know they are to be able to swiftly cash out their investments if the need arises.
A second important division falls between the bond markets. The money markets are used for the raising of short-term finance, sometimes for loans that are expected to be paid back as early as overnight. In contrast, the "capital markets" are used for the raising of long-term finance, such as the purchase of shares/equities, or for loans that are not expected to be paid back for at least a year. Funds borrowed from money markets are used for general operating expenses, to provide liquid assets for brief periods. For example, a company may have inbound payments from customers that have not yet cleared, but need immediate cash to pay its employees; when a company borrows from the primary capital markets the purpose is to invest in additional physical capital goods, which will be used to help increase its income. It can take many months or years before the investment generates sufficient return to pay back its cost, hence the finance is long term. Together, money markets and capital markets form the financial markets, as the term is narrowly understood.
The capital market is concerned with long-term finance. In the widest sense, it consists of a series of channels through which the savings of the community are made available for industrial and commercial enterprises and public authorities. Regular bank lending is not classed as a capital market transaction when loans are extended for a period longer than a year. First, regular bank loans are not securitized. Second, lending from banks is more regulated than capital market lending. Third, bank depositors tend to be more risk-averse than capital market investors; these three differences all act to limit institutional lending as a source of finance. Two additional differences, this time favoring lending by banks, are that banks are more accessible for small and medium-sized companies, that they have the ability to create money as they lend. In the 20th century, most company finance apart from share issues was raised by bank loans, but since about 1980 there has been an ongoing trend for disintermediation, where large and creditworthy companies have found they have to pay out less interest if they borrow directly from capital markets rather than from banks.
The tendency for companies to borrow from capital markets instead of banks has been strong in the United States. According to the Financial Times, capital markets overtook bank lending as the leading source of long-term finance in 2009, which reflects the risk aversion and bank regulation in the wake of the 2008 financial crisis. Compared to in the United States, companies in the European Union have a greater reliance on bank lending for funding. Efforts to enable companies to raise more funding through capital markets are being coordinated through the EU's Capital Markets Union initiative; when a government wants to raise long-term finance it will sell bonds in the capital markets. In the 20th and early 21st centuries, many governments would use investment banks to organize the sale of their bonds; the leading bank would underwrite the bonds, would head up a syndicate of brokers, some of whom might
A stock trader or equity trader or share trader is a person or company involved in trading equity securities. Stock traders may be an agent, arbitrageur, stockbroker; such equity trading in large publicly traded companies may be through one of the major stock exchanges, such as the New York Stock Exchange or the London Stock Exchange, which serve as managed auctions for stock trades. Stock shares in smaller public companies are sold in over-the-counter markets. Equity trading can be performed by the owner of the shares, or by an agent authorized to buy and sell on behalf of the share's owner. Proprietary trading is selling for the trader's own profit or loss. In this case, the principal is the owner of the shares. Agency trading is buying and selling by an agent a stockbroker, on behalf of a client. Agents are paid a commission for performing the trade. Major stock exchanges have market makers who help limit price variation by buying and selling a particular company's shares on their own behalf and on behalf of other clients.
Stock traders help manage portfolios. Traders engage in buying and selling bonds, stocks and shares in hedge funds. A stock trader conducts extensive research and observation of how financial markets perform; this is accomplished through microeconomic study. Other duties of a stock trader include comparison of financial analysis to current and future regulation of his or her occupation. Professional stock traders who work for a financial company, are required to complete an internship of up to four months before becoming established in their career field. In the United States, for example, internship is followed up by taking and passing a Financial Industry Regulatory Authority-administered Series 63 or 65 exam. Stock traders who pass demonstrate familiarity with U. S. Securities and Exchange Commission compliant practices and regulation. Stock traders with experience obtain a four-year degree in a financial, accounting or economics field after licensure. Supervisory positions as a trader may require an MBA for advanced stock market analysis.
The U. S. Bureau of Labor Statistics reported that growth for stock and commodities traders was forecast to be greater than 21% between 2006 and 2016. In that period, stock traders would benefit from trends driven by pensions of baby boomers and their decreased reliance on Social Security. U. S. Treasury bonds would be traded on a more fluctuating basis. Stock traders just entering the field suffer. While entry into this career field is competitive, increased ownership of stocks and mutual funds drive substantial career growth of traders. Banks were offering more opportunities for people of average means to invest and speculate in stocks; the BLS reported that stock traders had median annual incomes of $68,500. Experienced traders of stocks and mutual funds have the potential to earn more than $145,600 annually. Contrary to a stockbroker, a professional who arranges transactions between a buyer and a seller, gets a guaranteed commission for every deal executed, a professional trader may have a steep learning curve and his/her ultra-competitive performance based career may be cut short during generalized stock market crashes.
Stock market trading operations have a high level of risk and complexity for unwise and inexperienced stock traders/investors seeking an easy way to make money quickly. In addition, trading activities are not free. Stock speculators/investors face several costs such as commissions and fees to be paid for the brokerage and other services, like the buying/selling orders placed at the stock exchange. Depending on the nature of each national or state legislation involved, a large array of fiscal obligations must be respected, taxes are charged by jurisdictions over those transactions and capital gains that fall within their scope. However, these fiscal obligations will vary from jurisdiction to jurisdiction. Among other reasons, there could be some instances where taxation is incorporated into the stock price through the differing legislation that companies have to comply with in their respective jurisdictions. Beyond these costs are the opportunity costs of money and time, currency risk, financial risk, Internet and news agency services and electricity consumption expenses—all of which must be accounted for.
Jérôme Kerviel and Kweku Adoboli, two rogue traders, worked in the same type of position, the Delta One desk - a table where derivatives are traded, not single stocks or bonds. These types of operations are simple and reserved for novice traders who specialize in exchange-traded funds, financial products that mimic the performance of an index; as they are easy to use, they facilitate portfolio diversification through the acquisition of contracts backed by a stock index or industry. The two traders were familiar to control procedures, they worked in the back office, the administrative body of the bank that controls the regularity of operations, before moving to trading. According to the report of the Inspector General of Societe Generale, in 2005 and 2006 Kerviel "led" by taking 100 to 150 million-euro positions on the shares of Solarworld AG listed in Germany. Moreover, the "unauthorized trading" of Kweku Adoboli, similar to Kerviel, did not date back a long way. Adoboli h
The secondary market called the aftermarket and follow on public offering is the financial market in which issued financial instruments such as stock, bonds and futures are bought and sold. Another frequent usage of "secondary market" is to refer to loans which are sold by a mortgage bank to investors such as Fannie Mae and Freddie Mac; the term "secondary market" is used to refer to the market for any used goods or assets, or an alternative use for an existing product or asset where the customer base is the second market. With primary issuances of securities or financial instruments, or the primary market, investors purchase these securities directly from issuers such as corporations issuing shares in an IPO or private placement, or directly from the federal government in the case of treasuries. After the initial issuance, investors can purchase from other investors in the secondary market; the secondary market for a variety of assets can vary from loans to stocks, from fragmented to centralized, from illiquid to liquid.
The major stock exchanges are the most visible example of liquid secondary markets - in this case, for stocks of publicly traded companies. Exchanges such as the New York Stock Exchange, London Stock Exchange and Nasdaq provide a centralized, liquid secondary market for the investors who own stocks that trade on those exchanges. Most bonds and structured products trade “over the counter,” or by phoning the bond desk of one’s broker-dealer. Loans sometimes trade online using a Loan Exchange. In the secondary market, securities are sold by and transferred from one investor or speculator to another, it is therefore important that the secondary market be liquid. As a general rule, the greater the number of investors that participate in a given marketplace, the greater the centralization of that marketplace, the more liquid the market. Fundamentally, secondary markets mesh the investor's preference for liquidity with the capital user's preference to be able to use the capital for an extended period of time.
Accurate share price allocates scarce capital more efficiently when new projects are financed through a new primary market offering, but accuracy may matter in the secondary market because: 1) price accuracy can reduce the agency costs of management, make hostile takeover a less risky proposition and thus move capital into the hands of better managers, 2) accurate share price aids the efficient allocation of debt finance whether debt offerings or institutional borrowing. The term may refer to markets in things of value other than securities. For example, the ability to buy and sell intellectual property such as patents, or rights to musical compositions, is considered a secondary market because it allows the owner to resell property entitlements issued by the government. Secondary markets can be said to exist in some real estate contexts as well; these have similar functions as secondary stock and bond markets in allowing for speculation, providing liquidity, financing through securitization.
It facilitates marketability of the long term instrument. It provides instant valuation of securities caused by changes in the environment. Private equity secondary market refers to the buying and selling of pre-existing investor commitments to private equity funds. Sellers of private equity investments sell not only the investments in the fund but their remaining unfunded commitments to the funds. Due to the increased compliance and reporting obligations enacted in the Sarbanes-Oxley Act of 2002, private secondary markets began to emerge, such as SecondMarket and SecondaryLink; these markets are only available to institutional or accredited investors and allow trading of unregistered and private company securities. Digital currency exchanges are being regarded as secondary markets. Aftermarket Clean Energy Bank Grey market Primary market Third market Fourth market Original equipment manufacturer Private equity secondary market Reseller
A quantitative analyst is a person who specializes in the application of mathematical and statistical methods to financial and risk management problems. The occupation is similar to those in industrial mathematics in other industries. Although the original quantitative analysts were "sell side quants" from market maker firms, concerned with derivatives pricing and risk management, the meaning of the term has expanded over time to include those individuals involved in any application of mathematics in finance, including the buy side. Examples include statistical arbitrage, quantitative investment management, algorithmic trading, electronic market making. Quantitative finance started in 1900 with Louis Bachelier's doctoral thesis Theory of Speculation, which provided a model to price options under a Normal Distribution. Harry Markowitz's 1952 doctoral thesis "Portfolio Selection" and its published version was one of the first efforts in economics journals to formally adapt mathematical concepts to finance.
Markowitz formalized a notion of mean return and covariances for common stocks which allowed him to quantify the concept of "diversification" in a market. He showed how to compute the mean return and variance for a given portfolio and argued that investors should hold only those portfolios whose variance is minimal among all portfolios with a given mean return. Although the language of finance now involves Itō calculus, management of risk in a quantifiable manner underlies much of the modern theory. In 1965 Paul Samuelson introduced stochastic calculus into the study of finance. In 1969 Robert Merton promoted continuous-time processes. Merton was motivated by the desire to understand how prices are set in financial markets, the classical economics question of "equilibrium," and in papers he used the machinery of stochastic calculus to begin investigation of this issue. At the same time as Merton's work and with Merton's assistance, Fischer Black and Myron Scholes developed the Black–Scholes model, awarded the 1997 Nobel Memorial Prize in Economic Sciences.
It provided a solution for a practical problem, that of finding a fair price for a European call option, i.e. the right to buy one share of a given stock at a specified price and time. Such options are purchased by investors as a risk-hedging device. In 1981, Harrison and Pliska used the general theory of continuous-time stochastic processes to put the Black–Scholes model on a solid theoretical basis, showed how to price numerous other derivative securities. Emanuel Derman's 2004 book My Life as a Quant helped to both make the role of a quantitative analyst better known outside of finance, to popularize the abbreviation "quant" for a quantitative analyst. Quantitative analysts come from applied mathematics, physics or engineering backgrounds rather than economics-related fields, quantitative analysis is a major source of employment for people with mathematics and physics PhD degrees, or with financial mathematics masters degrees. A quantitative analyst will need extensive skills in computer programming, most C, C++, Java, R, MATLAB, Python.
This demand for quantitative analysts has led to a resurgence in demand for actuarial qualifications as well as creation of specialized Masters and PhD courses in financial engineering, mathematical finance, computational finance, and/or financial reinsurance. In particular, Master's degrees in mathematical finance, financial engineering, operations research, computational statistics, machine learning, financial analysis are becoming more popular with students and with employers. See Master of Quantitative Finance. Data science and machine learning analysis and modelling methods are being employed in portfolio performance and portfolio risk modelling, as such data science and machine learning Master's graduates are in demand as quantitative analysts. In sales & trading, quantitative analysts work to determine prices, manage risk, identify profitable opportunities; this was a distinct activity from trading but the boundary between a desk quantitative analyst and a quantitative trader is blurred, it is now difficult to enter trading as a profession without at least some quantitative analysis education.
In the field of algorithmic trading it has reached the point where there is little meaningful difference. Front office work favours a higher speed to quality ratio, with a greater emphasis on solutions to specific problems than detailed modeling. FOQs are better paid than those in back office and model validation. Although skilled analysts, FOQs lack software engineering experience or formal training, bound by time constraints and business pressures, tactical solutions are adopted. Quantitative analysis is used extensively by asset managers. Some, such as FQ, AQR or Barclays, rely exclusively on quantitative strategies while others, such as Pimco, Blackrock or Citadel use a mix of quantitative and fundamental methods. Major firms invest large sums in an attempt to produce standard methods of evaluating prices and risk; these differ from front office tools in that Excel is rare, with most development being in C++, though Java and C# are sometimes used in non-performance critical tasks. LQs spend more time modeling ensuring the analytics are both efficient and correct, though there is tension between LQs and FOQs on the validity of their results.
LQs are required to understand techniques such as Monte Carlo methods and finite difference methods, as well as the nature of
With regard to futures contracts as well as other financial instruments, slippage is the difference between where the computer signaled the entry and exit for a trade and where actual clients, with actual money and exited the market using the computer’s signals. Market impact and frictional costs may contribute. Algorithmic trading is used to reduce slippage, algorithms can be backtested on past data to see the effects of slippage, but it’s impossible to eliminate entirely. Nassim Nicholas Taleb defines slippage as the difference between the average execution price and the initial midpoint of the bid and the offer for a given quantity to be executed. Knight and Satchell mention a flow trader needs to consider the effect of executing a large order on the market and to adjust the bid-ask spread accordingly, they calculate the liquidity cost as the difference between the execution price and the initial execution price. The associated image depicts the Level II quotes of the SPY ETF at a given instant in time.
The left hand side of the image contains the market depth for the current BID prices and the right hand side of the image contains the market depth for the current ASK prices. Each side of the image contains three columns: MM Name: This is the Market Maker name column Price: This is the "market depth" price. Size: This is the number of shares at this price level. So, 2 means 200 shares; the top left of the image represents the current BID price and the top right of the image represents the current ASK price. At the $151.07 bid price point, there are 300 shares available. At the $151.08 ask price point, there are 3900 shares available. This is represented in quote form as: $151.07 X 300 by $151.08 X 3900). To properly understand slippage, let's use the following example: Say, you wanted to purchase 20,000 shares of SPY right now; the problem here is that the current ASK price of $151.08 only contains 3900 shares being offered for sale, but you want to purchase 20,000 shares. If you need to purchase those shares now you must use a market order and you will incur slippage by doing so.
Using a market order to purchase your 20,000 shares would yield the following executions: Buy 2800 @ $151.08 Buy 1100 @ $151.08 Buy 3800 @ $151.09 Buy 900 @ $151.10 Buy 3700 @ $151.11 Buy 1200 @ $151.12 Buy 3700 @ $151.13 Buy 200 @ $151.14 Buy 1000 @ $151.15 Buy 400 @ $151.18 Buy 100 @ $151.22 Buy 600 @ $151.24 Buy 500 @ $151.25. The average purchase price of the above execution is: $151.11585. The difference between the current ASK price and your average purchase price represents your slippage. In this case, the cost of slippage would be calculated as follows: 20,000 X $151.08 - 20,000 X $151.11585 = $-717.00 Reverse slippage as described by Taleb occurs when the purchase of a large position is done at increasing prices, so that the mark to market value of the position increases. The danger occurs. If the trader manages to create a squeeze large enough this phenomenon can be profitable; this can be considered a type of market making. Taleb, Nassim Nicolas. Dynamic Hedging: Managing Vanilla and Exotic Options.
New York: John Wiley & Sons. ISBN 978-0-471-15280-4. John L. Knight, Stephen Satchell. Forecasting Volatility in the Financial Markets. Butterworth-Heinemann. ISBN 978-0-7506-5515-6
Australia the Commonwealth of Australia, is a sovereign country comprising the mainland of the Australian continent, the island of Tasmania and numerous smaller islands. It is the world's sixth-largest country by total area; the neighbouring countries are Papua New Guinea and East Timor to the north. The population of 25 million is urbanised and concentrated on the eastern seaboard. Australia's capital is Canberra, its largest city is Sydney; the country's other major metropolitan areas are Melbourne, Brisbane and Adelaide. Australia was inhabited by indigenous Australians for about 60,000 years before the first British settlement in the late 18th century, it is documented. After the European exploration of the continent by Dutch explorers in 1606, who named it New Holland, Australia's eastern half was claimed by Great Britain in 1770 and settled through penal transportation to the colony of New South Wales from 26 January 1788, a date which became Australia's national day; the population grew in subsequent decades, by the 1850s most of the continent had been explored and an additional five self-governing crown colonies established.
On 1 January 1901, the six colonies federated. Australia has since maintained a stable liberal democratic political system that functions as a federal parliamentary constitutional monarchy, comprising six states and ten territories. Being the oldest and driest inhabited continent, with the least fertile soils, Australia has a landmass of 7,617,930 square kilometres. A megadiverse country, its size gives it a wide variety of landscapes, with deserts in the centre, tropical rainforests in the north-east and mountain ranges in the south-east. A gold rush began in Australia in the early 1850s, its population density, 2.8 inhabitants per square kilometre, remains among the lowest in the world. Australia generates its income from various sources including mining-related exports, telecommunications and manufacturing. Indigenous Australian rock art is the oldest and richest in the world, dating as far back as 60,000 years and spread across hundreds of thousands of sites. Australia is a developed country, with the world's 14th-largest economy.
It has a high-income economy, with the world's tenth-highest per capita income. It is a regional power, has the world's 13th-highest military expenditure. Australia has the world's ninth-largest immigrant population, with immigrants accounting for 26% of the population. Having the third-highest human development index and the eighth-highest ranked democracy globally, the country ranks in quality of life, education, economic freedom, civil liberties and political rights, with all its major cities faring well in global comparative livability surveys. Australia is a member of the United Nations, G20, Commonwealth of Nations, ANZUS, Organisation for Economic Co-operation and Development, World Trade Organization, Asia-Pacific Economic Cooperation, Pacific Islands Forum and the ASEAN Plus Six mechanism; the name Australia is derived from the Latin Terra Australis, a name used for a hypothetical continent in the Southern Hemisphere since ancient times. When Europeans first began visiting and mapping Australia in the 17th century, the name Terra Australis was applied to the new territories.
Until the early 19th century, Australia was best known as "New Holland", a name first applied by the Dutch explorer Abel Tasman in 1644 and subsequently anglicised. Terra Australis still saw occasional usage, such as in scientific texts; the name Australia was popularised by the explorer Matthew Flinders, who said it was "more agreeable to the ear, an assimilation to the names of the other great portions of the earth". The first time that Australia appears to have been used was in April 1817, when Governor Lachlan Macquarie acknowledged the receipt of Flinders' charts of Australia from Lord Bathurst. In December 1817, Macquarie recommended to the Colonial Office. In 1824, the Admiralty agreed that the continent should be known by that name; the first official published use of the new name came with the publication in 1830 of The Australia Directory by the Hydrographic Office. Colloquial names for Australia include "Oz" and "the Land Down Under". Other epithets include "the Great Southern Land", "the Lucky Country", "the Sunburnt Country", "the Wide Brown Land".
The latter two both derive from Dorothea Mackellar's 1908 poem "My Country". Human habitation of the Australian continent is estimated to have begun around 65,000 to 70,000 years ago, with the migration of people by land bridges and short sea-crossings from what is now Southeast Asia; these first inhabitants were the ancestors of modern Indigenous Australians. Aboriginal Australian culture is one of the oldest continual civilisations on earth. At the time of first European contact, most Indigenous Australians were hunter-gatherers with complex economies and societies. Recent archaeological finds suggest. Indigenous Australians have an oral culture with spiritual values based on reverence for the land and a belief in the Dreamtime; the Torres Strait Islanders, ethnically Melanesian, obtained their livelihood from seasonal horticulture and the resources of their reefs and seas. The northern coasts and waters of Australia were visited s
A stock exchange, securities exchange or bourse, is a facility where stock brokers and traders can buy and sell securities, such as shares of stock and bonds and other financial instruments. Stock exchanges may provide for facilities the issue and redemption of such securities and instruments and capital events including the payment of income and dividends. Securities traded on a stock exchange include stock issued by listed companies, unit trusts, pooled investment products and bonds. Stock exchanges function as "continuous auction" markets with buyers and sellers consummating transactions via open outcry at a central location such as the floor of the exchange or by using an electronic trading platform. To be able to trade a security on a certain stock exchange, the security must be listed there. There is a central location at least for record keeping, but trade is less linked to a physical place, as modern markets use electronic communication networks, which give them advantages of increased speed and reduced cost of transactions.
Trade on an exchange is restricted to brokers. In recent years, various other trading venues, such as electronic communication networks, alternative trading systems and "dark pools" have taken much of the trading activity away from traditional stock exchanges. Initial public offerings of stocks and bonds to investors is done in the primary market and subsequent trading is done in the secondary market. A stock exchange is the most important component of a stock market. Supply and demand in stock markets are driven by various factors that, as in all free markets, affect the price of stocks. There is no obligation for stock to be issued through the stock exchange itself, nor must stock be subsequently traded on an exchange; such trading may be off over-the-counter. This is the usual way that bonds are traded. Stock exchanges are part of a global securities market. Stock exchanges serve an economic function in providing liquidity to shareholders in providing an efficient means of disposing of shares.
The idea of debt dates back to the ancient world, as evidenced for example by ancient Mesopotamian city clay tablets recording interest-bearing loans. There is little consensus among scholars as to; some see the key event as the Dutch East India Company's founding in 1602, while others point to earlier developments. Economist Ulrike Malmendier of the University of California at Berkeley argues that a share market existed as far back as ancient Rome. One of Europe's oldest stock exchanges is the Frankfurt Stock Exchange established in 1585 in Frankfurt am Main. In the Roman Republic, which existed for centuries before the Empire was founded, there were societates publicanorum, organizations of contractors or leaseholders who performed temple-building and other services for the government. One such service was the feeding of geese on the Capitoline Hill as a reward to the birds after their honking warned of a Gallic invasion in 390 B. C. Participants in such organizations had partes or shares, a concept mentioned various times by the statesman and orator Cicero.
In one speech, Cicero mentions "shares that had a high price at the time". Such evidence, in Malmendier's view, suggests the instruments were tradable, with fluctuating values based on an organization's success; the societas declined into obscurity in the time of the emperors, as most of their services were taken over by direct agents of the state. Tradable bonds as a used type of security were a more recent innovation, spearheaded by the Italian city-states of the late medieval and early Renaissance periods. While the Italian city-states produced the first transferable government bonds, they did not develop the other ingredient necessary to produce a fully-fledged capital market: the stock market in its modern sense. In the early 1600s the Dutch East India Company became the first company in history to issue bonds and shares of stock to the general public; as Edward Stringham notes, "companies with transferable shares date back to classical Rome, but these were not enduring endeavors and no considerable secondary market existed."
The VOC, formed to build up the spice trade, operated as a colonial ruler in what is now Indonesia and beyond, a purview that included conducting military operations against the wishes of the exploited natives and of competing colonial powers. Control of the company was held by its directors, with ordinary shareholders not having much influence on management or access to the company's accounting statements. However, shareholders were rewarded well for their investment; the company paid an average dividend of over 16% per year from 1602 to 1650. Financial innovation in Amsterdam took many forms. In 1609, investors led by Isaac Le Maire formed history's first bear market syndicate, but their coordinated trading had only a modest impact in driving down share prices, which tended to remain robust throughout the 17th century. By the 1620s, the company was expanding its securities issuance with the first use of corporate bonds. Joseph de la Vega known as Joseph Penso de la Vega and by other variations of his name, was an Amsterdam trader from a Spanish Jewish family and a prolific writer as well as a successful businessman in 17th-century Amsterdam.
His 1688 book Confusion of Confusions explained the workings of the city's stock market. It was the earliest book about stock trading and inner workings of a stock market, taking the form of a dialogue between a merchant, a shareholder and a philosopher, the book described a market, sophisticated but prone to excesses, de la Vega of