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
The stock of a corporation is all of the shares into which ownership of the corporation is divided. In American English, the shares are known as "stocks." A single share of the stock represents fractional ownership of the corporation in proportion to the total number of shares. This entitles the stockholder to that fraction of the company's earnings, proceeds from liquidation of assets, or voting power dividing these up in proportion to the amount of money each stockholder has invested. Not all stock is equal, as certain classes of stock may be issued for example without voting rights, with enhanced voting rights, or with a certain priority to receive profits or liquidation proceeds before or after other classes of shareholders. Stock can be bought and sold or on stock exchanges, such transactions are heavily regulated by governments to prevent fraud, protect investors, benefit the larger economy; as new shares are issued by a company, the ownership and rights of existing shareholders are diluted in return for cash to sustain or grow the business.
Companies can buy back stock, which lets investors recoup the initial investment plus capital gains from subsequent rises in stock price. Stock options, issued by many companies as part of employee compensation, do not represent ownership, but represent the right to buy ownership at a future time at a specified price; this would represent a windfall to the employees if the option is exercised when the market price is higher than the promised price, since if they sold the stock they would keep the difference. A person who owns a specific percentage of the share has the ownership of the corporation proportional to his share; the shares together form stock. The stock of a corporation is partitioned into shares, the total of which are stated at the time of business formation. Additional shares may subsequently be authorized by the existing shareholders and issued by the company. In some jurisdictions, each share of stock has a certain declared par value, a nominal accounting value used to represent the equity on the balance sheet of the corporation.
In other jurisdictions, shares of stock may be issued without associated par value. Shares represent a fraction of ownership in a business. A business may declare different types of shares, each having distinctive ownership rules, privileges, or share values. Ownership of shares may be documented by issuance of a stock certificate. A stock certificate is a legal document that specifies the number of shares owned by the shareholder, other specifics of the shares, such as the par value, if any, or the class of the shares. In the United Kingdom, Republic of Ireland, South Africa, Australia, stock can refer to different financial instruments such as government bonds or, less to all kinds of marketable securities. Stock takes the form of shares of either common stock or preferred stock; as a unit of ownership, common stock carries voting rights that can be exercised in corporate decisions. Preferred stock differs from common stock in that it does not carry voting rights but is entitled to receive a certain level of dividend payments before any dividends can be issued to other shareholders.
Convertible preferred stock is preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares any time after a predetermined date. Shares of such stock are called "convertible preferred shares". New equity issue may have specific legal clauses attached that differentiate them from previous issues of the issuer; some shares of common stock may be issued without the typical voting rights, for instance, or some shares may have special rights unique to them and issued only to certain parties. New issues that have not been registered with a securities governing body may be restricted from resale for certain periods of time. Preferred stock may be hybrid by having the qualities of bonds of fixed returns and common stock voting rights, they have preference in the payment of dividends over common stock and have been given preference at the time of liquidation over common stock. They have other features of accumulation in dividend. In addition, preferred stock comes with a letter designation at the end of the security.
B, whereas Class "A" shares of ORION DHC, Inc will sell under ticker OODHA until the company drops the "A" creating ticker OODH for its "Common" shares only designation. This extra letter does not mean that any exclusive rights exist for the shareholders but it does let investors know that the shares are considered for such, these rights or privileges may change based on the decisions made by the underlying company. "Rule 144 Stock" is an American term given to shares of stock subject to SEC Rule 144: Selling Restricted and Control Securities. Under Rule 144, restricted and controlled securities are acquired in unregistered form. Investors either purchase or take ownership of these securities through private sales from the issuing company or from an affiliate of the issuer. Investors wishing to sell these securities are subject to different rules than those selling traditional common or preferred stock; these individuals will only be allowed to liquidate their securities after meeting the specific conditions set forth by SEC Rule 144.
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 security is a tradable financial asset. The term refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some jurisdictions the term excludes financial instruments other than equities and fixed income instruments. In some jurisdictions it includes some instruments that are close to equities and fixed income, e.g. equity warrants. In some countries and languages the term "security" is used in day-to-day parlance to mean any form of financial instrument though the underlying legal and regulatory regime may not have such a broad definition. In the United Kingdom, the national competent authority for financial markets regulation is the Financial Conduct Authority. In the United States, a security is a tradable financial asset of any kind. Securities are broadly categorized into: debt securities equity securities derivatives; the company or other entity issuing the security is called the issuer. A country's regulatory structure determines. For example, private investment pools may have some features of securities, but they may not be registered or regulated as such if they meet various restrictions.
Securities may be represented by a certificate or, more "non-certificated", in electronic or "book entry" only form. Certificates may be bearer, meaning they entitle the holder to rights under the security by holding the security, or registered, meaning they entitle the holder to rights only if he or she appears on a security register maintained by the issuer or an intermediary, they include shares of corporate stock or mutual funds, bonds issued by corporations or governmental agencies, stock options or other options, limited partnership units, various other formal investment instruments that are negotiable and fungible. Securities may be classified according to many categories or classification systems: Currency of denomination Ownership rights Terms to maturity Degree of liquidity Income payments Tax treatment Credit rating Industrial sector or "industry". Region or country Market capitalization State Securities are the traditional way that commercial enterprises raise new capital; these may be an attractive alternative to bank loans depending on their pricing and market demand for particular characteristics.
Another disadvantage of bank loans as a source of financing is that the bank may seek a measure of protection against default by the borrower via extensive financial covenants. Through securities, capital is provided by investors who purchase the securities upon their initial issuance. In a similar way, a government may issue securities too. Investors in securities may be retail, i.e. members of the public investing other than by way of business. The greatest part of investment, in terms of volume, is wholesale, i.e. by financial institutions acting on their own account, or on behalf of clients. Important institutional investors include investment banks, insurance companies, pension funds and other managed funds; the traditional economic function of the purchase of securities is investment, with the view to receiving income or achieving capital gain. Debt securities offer a higher rate of interest than bank deposits, equities may offer the prospect of capital growth. Equity investment may offer control of the business of the issuer.
Debt holdings may offer some measure of control to the investor if the company is a fledgling start-up or an old giant undergoing'restructuring'. In these cases, if interest payments are missed, the creditors may take control of the company and liquidate it to recover some of their investment; the last decade has seen an enormous growth in the use of securities as collateral. Purchasing securities with borrowed money secured by other securities or cash itself is called "buying on margin". Where A is owed a debt or other obligation by B, A may require B to deliver property rights in securities to A, either at inception or only in default. For institutional loans, property rights are not transferred but enable A to satisfy its claims in the event that B fails to make good on its obligations to A or otherwise becomes insolvent. Collateral arrangements are divided into two broad categories, namely security interests and outright collateral transfers. Commercial banks, investment banks, government agencies and other institutional investors such as mutual funds are significant collateral takers as well as providers.
In addition, private parties may utilize stocks or other securities as collateral for portfolio loans in securities lending scenarios. On the consumer level, loans against securities have grown into three distinct groups over the last decade: 1) Standard Institutional Loans offering low loan-to-value with
International Standard Serial Number
An International Standard Serial Number is an eight-digit serial number used to uniquely identify a serial publication, such as a magazine. The ISSN is helpful in distinguishing between serials with the same title. ISSN are used in ordering, interlibrary loans, other practices in connection with serial literature; the ISSN system was first drafted as an International Organization for Standardization international standard in 1971 and published as ISO 3297 in 1975. ISO subcommittee TC 46/SC 9 is responsible for maintaining the standard; when a serial with the same content is published in more than one media type, a different ISSN is assigned to each media type. For example, many serials are published both in electronic media; the ISSN system refers to these types as electronic ISSN, respectively. Conversely, as defined in ISO 3297:2007, every serial in the ISSN system is assigned a linking ISSN the same as the ISSN assigned to the serial in its first published medium, which links together all ISSNs assigned to the serial in every medium.
The format of the ISSN is an eight digit code, divided by a hyphen into two four-digit numbers. As an integer number, it can be represented by the first seven digits; the last code digit, which may be 0-9 or an X, is a check digit. Formally, the general form of the ISSN code can be expressed as follows: NNNN-NNNC where N is in the set, a digit character, C is in; the ISSN of the journal Hearing Research, for example, is 0378-5955, where the final 5 is the check digit, C=5. To calculate the check digit, the following algorithm may be used: Calculate the sum of the first seven digits of the ISSN multiplied by its position in the number, counting from the right—that is, 8, 7, 6, 5, 4, 3, 2, respectively: 0 ⋅ 8 + 3 ⋅ 7 + 7 ⋅ 6 + 8 ⋅ 5 + 5 ⋅ 4 + 9 ⋅ 3 + 5 ⋅ 2 = 0 + 21 + 42 + 40 + 20 + 27 + 10 = 160 The modulus 11 of this sum is calculated. For calculations, an upper case X in the check digit position indicates a check digit of 10. To confirm the check digit, calculate the sum of all eight digits of the ISSN multiplied by its position in the number, counting from the right.
The modulus 11 of the sum must be 0. There is an online ISSN checker. ISSN codes are assigned by a network of ISSN National Centres located at national libraries and coordinated by the ISSN International Centre based in Paris; the International Centre is an intergovernmental organization created in 1974 through an agreement between UNESCO and the French government. The International Centre maintains a database of all ISSNs assigned worldwide, the ISDS Register otherwise known as the ISSN Register. At the end of 2016, the ISSN Register contained records for 1,943,572 items. ISSN and ISBN codes are similar in concept. An ISBN might be assigned for particular issues of a serial, in addition to the ISSN code for the serial as a whole. An ISSN, unlike the ISBN code, is an anonymous identifier associated with a serial title, containing no information as to the publisher or its location. For this reason a new ISSN is assigned to a serial each time it undergoes a major title change. Since the ISSN applies to an entire serial a new identifier, the Serial Item and Contribution Identifier, was built on top of it to allow references to specific volumes, articles, or other identifiable components.
Separate ISSNs are needed for serials in different media. Thus, the print and electronic media versions of a serial need separate ISSNs. A CD-ROM version and a web version of a serial require different ISSNs since two different media are involved. However, the same ISSN can be used for different file formats of the same online serial; this "media-oriented identification" of serials made sense in the 1970s. In the 1990s and onward, with personal computers, better screens, the Web, it makes sense to consider only content, independent of media; this "content-oriented identification" of serials was a repressed demand during a decade, but no ISSN update or initiative occurred. A natural extension for ISSN, the unique-identification of the articles in the serials, was the main demand application. An alternative serials' contents model arrived with the indecs Content Model and its application, the digital object identifier, as ISSN-independent initiative, consolidated in the 2000s. Only in 2007, ISSN-L was defined in the
Day trading is speculation in securities buying and selling financial instruments within the same trading day, such that all positions are closed before the market closes for the trading day. Traders who trade in this capacity with the motive of profit are therefore speculators; the methods of quick trading contrast with the long-term trades underlying buy and hold and value investing strategies. Day traders exit positions before the market closes to avoid unmanageable risks negative price gaps between one day's close and the next day's price at the open. Day traders use margin leverage. In the United States, people who make more than 4 day trades per week are termed pattern day traders and are required to maintain $25,000 in equity in their accounts. Since margin interest is only charged on overnight balances, the trader may pay no interest fees for the margin benefit, though still running the risk of a margin call. Margin interest rates are based on the broker's call; some of the more day-traded financial instruments are stocks, currencies, a host of futures contracts such as equity index futures, interest rate futures, currency futures and commodity futures.
Day trading was once an activity, exclusive to financial firms and professional speculators. Many day traders are bank or investment firm employees working as specialists in equity investment and fund management. Day trading gained popularity after the deregulation of commissions in the United States in 1975, the advent of electronic trading platforms in the 1990s, with the stock price volatility during the dot-com bubble; some day traders use an intra-day technique known as scalping that has the trader holding a position for a few minutes or seconds. Because of the nature of financial leverage and the rapid returns that are possible, day trading results can range from profitable to unprofitable, high-risk profile traders can generate either huge percentage returns or huge percentage losses; because of the high profits that day trading makes possible, these traders are sometimes portrayed as "bandits" or "gamblers" by other investors. Day trading is risky if any of the following is present while trading: trading a loser's game/system rather than a game that's at least winnable, inadequate risk capital with the accompanying excess stress of having to "survive", incompetent money management.
The common use of buying on margin amplifies gains and losses, such that substantial losses or gains can occur in a short period of time. In addition, brokers allow bigger margin for day traders. In the United States for example, while the initial margin required to hold a stock position overnight are 50% of the stock's value due to Regulation T, many brokers allow pattern day trader accounts to use levels as low as 25% for intraday purchases; this means a day trader with the legal minimum $25,000 in his account can buy $100,000 worth of stock during the day, as long as half of those positions are exited before the market close. Because of the high risk of margin use, of other day trading practices, a day trader will have to exit a losing position quickly, in order to prevent a greater, unacceptable loss, or a disastrous loss, much larger than his original investment, or larger than his total assets; the most important U. S. stocks were traded on the New York Stock Exchange. A trader would contact a stockbroker, who would relay the order to a specialist on the floor of the NYSE.
These specialists would each make markets in only a handful of stocks. The specialist would match the purchaser with another broker's seller. Before 1975, brokerage commissions were fixed at 1% of the amount of the trade, i.e. to purchase $10,000 worth of stock cost the buyer $100 in commissions and same 1% to sell. Meaning that to profit trades had to make over 2 % to make any real gain. One of the first steps to make day trading of shares profitable was the change in the commission scheme. In 1975, the United States Securities and Exchange Commission made fixed commission rates illegal, giving rise to discount brokers offering much reduced commission rates. Financial settlement periods used to be much longer: Before the early 1990s at the London Stock Exchange, for example, stock could be paid for up to 10 working days after it was bought, allowing traders to buy shares at the beginning of a settlement period only to sell them before the end of the period hoping for a rise in price; this activity was identical to modern day trading, but for the longer duration of the settlement period.
But today, to reduce market risk, the settlement period is two working days. Reducing the settlement period reduces the likelihood of default, but was impossible before the advent of electronic ownership transfer; the systems by which stocks are traded have evolved, the second half of the twentieth century having seen the advent of electronic communication networks. These are large proprietary computer networks on which brokers can list a certain amount of securities to sell at a certain price or offer to buy a certain amount of securities at a certain price. ECNs and exchanges are known to traders by a three- or four-letter designators, which identify the ECN or exchange on Level II stock scr
Confirmation bias is the tendency to search for, interpret and recall information in a way that confirms one's preexisting beliefs or hypotheses. It is a systematic error of inductive reasoning. People display this bias when they gather or remember information selectively, or when they interpret it in a biased way; the effect is stronger for charged issues and for entrenched beliefs. Confirmation bias is of particular current interest because of the increasing polarisation between left-wing and right-wing political viewpoints, the gullible acceptance of the current rapid spread of fake news. People tend to interpret ambiguous evidence as supporting their existing position. Biased search and memory have been invoked to explain attitude polarization, belief perseverance, the irrational primacy effect and illusory correlation. A series of psychological experiments in the 1960s suggested that people are biased toward confirming their existing beliefs. Work re-interpreted these results as a tendency to test ideas in a one-sided way, focusing on one possibility and ignoring alternatives.
In certain situations, this tendency can bias people's conclusions. Explanations for the observed biases include wishful thinking and the limited human capacity to process information. Another explanation is that people show confirmation bias because they are weighing up the costs of being wrong, rather than investigating in a neutral, scientific way; however scientists can be prone to confirmation bias. Confirmation biases contribute to overconfidence in personal beliefs and can maintain or strengthen beliefs in the face of contrary evidence. Poor decisions due to these biases have been found in organizational contexts. Confirmation bias is called confirmatory bias. An alternative name is myside bias. Confirmation bias is a variation of the more general tendency of apophenia - the tendency to mistakenly perceive connections and meaning between unrelated things. Confirmation biases are effects in information processing, they differ from what is sometimes called the behavioral confirmation effect known as self-fulfilling prophecy, in which a person's expectations influence their own behavior, bringing about the expected result.
Some psychologists restrict the term confirmation bias to selective collection of evidence that supports what one believes while ignoring or rejecting evidence that supports a different conclusion. Others apply the term more broadly to the tendency to preserve one's existing beliefs when searching for evidence, interpreting it, or recalling it from memory. Experiments have found that people tend to test hypotheses in a one-sided way, by searching for evidence consistent with their current hypothesis. Rather than searching through all the relevant evidence, they phrase questions to receive an affirmative answer that supports their theory, they look for the consequences that they would expect if their hypothesis were true, rather than what would happen if they were false. For example, someone using yes/no questions to find a number they suspect to be the number 3 might ask, "Is it an odd number?" People prefer this type of question, called a "positive test" when a negative test such as "Is it an number?" would yield the same information.
However, this does not mean. In studies where subjects could select either such pseudo-tests or genuinely diagnostic ones, they favored the genuinely diagnostic; the preference for positive tests in itself is not a bias, since positive tests can be informative. However, in combination with other effects, this strategy can confirm existing beliefs or assumptions, independently of whether they are true. In real-world situations, evidence is complex and mixed. For example, various contradictory ideas about someone could each be supported by concentrating on one aspect of his or her behavior, thus any search for evidence in favor of a hypothesis is to succeed. One illustration of this is the way the phrasing of a question can change the answer. For example, people who are asked, "Are you happy with your social life?" report greater satisfaction than those asked, "Are you unhappy with your social life?"Even a small change in a question's wording can affect how people search through available information, hence the conclusions they reach.
This was shown using a fictional child custody case. Participants read. Parent B had a mix of salient positive and negative qualities: a close relationship with the child but a job that would take them away for long periods of time; when asked, "Which parent should have custody of the child?" the majority of participants chose Parent B, looking for positive attributes. However, when asked, "Which parent should be denied custody of the child?" they looked for negative attributes and the majority answered that Parent B should be denied custody, implying that Parent A should have custody. Similar studies have demonstrated how people engage in a biased search for information, but that this phenomenon may be limited by a preference for genuine diagnostic tests. In an initial experiment, participants rated another person on the introversion–extroversion personality dimension on the basis of an interview, they chose the interview questions from a given list. When the i