Syndicate
Documentation of Shares
The negotiable securities may be represented in two different ways: as securities or as annotations in an account. In the past, investors were permitted to “touch” its investment, due that the securities where presented on a sheet of paper. Today, most of the institutions don’t issue paper securities anymore (Physical), but that they are represented by annotations in an account.
The more agility and quickness of these will suppose a greater advance in the process of market trading: compensation and liquidation of operations.
The securities represented by this system will constitute as such once inscribed on the corresponding accounting records, in which the physical movement of the securities implied in a financial trade is substituted by a simple accounting registry.
How to Sell and Buy Securities
The securities can be bought or sold on the stock exchange market in any quantity and at the actual price of the market.
So then, the price of a security, also denominated as exchange, current price or quotation, is fixed to the point in which the point of the offer and the demand coincide. This operation denominated as contracting, trading or negotiations vary according to the country in which is done.
We can basically distinguish two types of negotiations: By out loud negotiations of shares (circular market) and by electronic market or screen negotiation (constant market).
The old ways of stock contracting was based on the circular market system. Physically a circular market is an area reserved for the negotiation of a determined group of securities, by the verbal transmission of the prices of the same as bought or sold.
Some international stock exchange markets, as the one in New York (NYSE), still use this system. However, today the mechanism has been modernized and the automatic contracting (computer) predominates through a constant market.