Organized security exchanges have developed to make the buying and selling of securities easier. The securities exchanges consist of individual investors, brokers, and intermediaries who deal in the purchase and sale of securities. Security exchanges do not sell or buy securities, they simply provide the location and services for the brokers who buy and sell.
Stock transactions are handled by a stockbroker.
A stockbroker buys and sells securities for clients. Stockbrokers act on the clients\' orders. Stockbrokers receive a fee and are associated with a brokerage house. To trade on the exchange, a «seat» must be purchased.
A seat is a membership. The members represent stockbrokers. When a stockbroker calls in an order to sell, the member representing that broker looks for a buyer at the price requested. When a broker calls in an order to buy, the exchange member looks for a buyer at the price offered.
The largest and best known exchange in the USA is the New York Stock Exchange (NYSE), also called «Big Board». There are more than 1,300 seats on the NYSE, and approximately 2,000 stocks and 3,500 bonds are traded daily. In order to be listed on the NYSE, a firm has to meet the following requirements:
1. Pretax earnings of at least $2.5 million in the previous year.
2. Tangible assets of at least 16 million.
3. At least 1 million shares of stock publicly held, and others.
The second largest stock market in the USA is the American Stock Market Exchange (AMEX). It is located in Manhattan and has about 500 full members and 400 associate members. AMEX operates in much the same way as NYSE, but smaller companies may qualify for listing.
There are also regional stock exchanges that serve regional markets.
The over-the-counter market (OTC) sells and buys unlisted securities outside the organized securities exchanges. About 5,000 brokers of OTC are scattered all over the country. They trade unlisted stocks and bonds by phone and keep in contact with each other.
The prices of the securities are established by supply and demand. Electronic screens in the offices of the brokerage firms display OTC transactions, so brokers continually keep customers up to date on the latest prices.
Options are traded on the major stock exchanges, but also on a special market for options, the Chicago Bond Options Exchange (CBOE).
Слова и выражения:
approximately – приблизительно
assets – активы
bond – облигация
broker – брокер
fee – комиссионные
intermediary – посредник
investor – инвестор
issue – выпуск, эмиссия; выпускать
list – регистрироваться ( на бирже )
membership – членство
negotiate – вести переговоры, торговать
option – опцион
order – приказ
pretax – до налогообложения
previous – предыдущий
previously – прежде
primary – первичный
scatter – разбрасывать
seat – место на бирже
secondary – вторичный
security – ценная бумага
stock – активы, акции
stockbroker – биржевой брокер, занимающийся продажей ценных бумаг, фондов
tangible – осязаемые (активы)
transaction – сделка
underwriter – поручитель
investment bank – инвестиционный банк
security exchange – фондовая биржа
deal in – работать, вести дела ( в сфере )
brokerage house – брокерская контора
New York Stock Exchange – Нью-йоркская фондовая биржа
Big Board – Большое табло
be listed – быть зарегистрированным ( на бирже )
meet the requirements – соответствовать требованиям
publicly held – распределенные среди инвесторов открытого акционерного общества
American Stock Market Exchange – Американская фондовая биржа
associate member – ассоциированный член
qualify for listing – соответствовать условиям регистрации
over the counter – без посредников ( букв .: через прилавок)
unlisted securities – незарегистрированные ценные бумаги
up to date – современный, текущий
Chicago Bond Options Exchange – Чикагская опционная биржа облигацийExercise 1
Answer the questions:
1. What markets are securities bought and sold at?
2. What is the difference between primary and secondary markets?
3. What does a company do if it wants to issue securities?
4. What is the structure of a securities exchange?
5. Who are stock transactions handled by?
6. How do stockbrokers earn their money?
7. What requirements does a firm have to meet to be listed at NYSE?
8. What is the difference between NYSE and AMEX?
9. What securities does OTS market deal in?
10. How are the prices of securities established?
1The Waltons invited their new neighbours over to dinner. During dinner Mr. Walton was asked what he did for a living.
Eight-year-old Brian Walton jumped in and said, «Daddy is a fisherman!» To which Mrs. Walton replied, «Brian, why do say that? Your daddy is a stockbroker, not a fisherman.»
«No, mom. Everytime we visit dad at work and he hangs up the phone he laughs, rubs his hands together and says \'I just caught another fish\'.»
2Two women were walking through the woods when a frog called out to them and said: «Help me, ladies! I am a stockbroker who, through an evil witch\'s curse, has been transformed into a frog. If one of you will kiss me, I\'ll be returned to my former state!»
One woman took out her purse, grabbed the frog, and stuffed it inside her handbag. The other woman, aghast, screamed, «Didn\'t you hear him? If you kiss him, he\'ll turn into a stockbroker!»
The second woman replied, «Sure, but these days a talking frog is worth more than a stockbroker!»
Слова и выражения:aghast – пораженный ужасом, ошеломленный
curse – проклятие; проклинать
dad – папочка
daddy – папочка
evil – зло; злобный
fisherman – рыбак
frog – лягушка
grab – хватать
mom – мамочка
purse – кошелек
rub – тереть, потирать
scream – орать, вопить
stuff – запихивать
witch – ведьма
wood – лес
hang up the phone – вешать телефонную трубку
is worth more – стоит гораздо большеExercise 2
Answer the questions:
1. Where did the Waltons invite their new neighbors?
2. Why did little Brian say that his dad was a fisherman?
3. Who called out to the women in the woods?
4. What had happened tp the stockbroker?
5. Why did the woman not kiss the frog?Money Markets in Great Britain
The Stock Exchange of the United Kingdom and the Republic of Ireland was formed in the last century. The main trading operations are being performed in London, but the Stock Exchange has also centres in Birmingham, Liverpool, Belfast, Bristol, Leeds, Manchester, Newcastle, Glasgow and Dublin.
The major functions of the Stock Exchange are:
– it provides a market for the investors to buy and sell securities;
– it helps to insure that the price of a deal is fair;
– the companies and others who wish to raise capital can easily do so at the ready secondary markets.
The most important way of raising long-term capital is by issuing shares. Companies may also issue debentures which make up long-term debt.
The issue of government stock which is taken by the public, financial institutions and other firms provides for long-term government finance.
On 27 October 1986, the capital market underwent revolutionary changes known since as the «Big Bang». It admitted «outsiders» to the Stock Exchange which had been limited to stockbrokers and stock jobbers. The «Big Bang» allowed banks and other institutions to acquire their own securities businesses. It also introduced the idea of «dual capacity». Before that a member firm could be only a broker acting as agent of clients and trading on a commission basis, or a jobber buying and selling shares as a principal «on his own book». It could not be both.
After the «Big Bang» a member can be:
– a market maker who acts as a jobber;
– an agency broker, who trades securities on com – mission;
– a dealer/broker (one firm may combine the functions of market making and agency brokerage at the same time).
The «Big Bang» led to bigger markets and higher profits in Great Britain financial industry.
Слова и выражения:admit – принимать, допускать
deal – сделка
debenture – долговое обязательство ( чаще – долгосрочное)
debt – долг, задолженность, обязательство
fair – честный
insure – гарантировать
jobber – маклер, профессиональный биржевик
outsiders – аутсайдеры, посторонние
principal – юридическое лицо, «сам себе начальник»
share – акция
undergo – претерпевать
long-term – долгосрочный
government stock – правительственные активы
" Big Bang" – «Большой взрыв»
dual capacity – двойная компетенция
on a commission basis – на основе комиссионных
on his own book – за свой собственный счет
market maker – участник рынкаExercise 3
Answer the questions:
1. When was the Stock Exchange of the United Kingdom and the Republic of Ireland formed?
2. In what cities are the trading operations of the English Money Market performed?