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Global Equity Market Capitalization
Size: 103 trillion USD (2021): US 40%, EMEA 22%, China/Hong Kong 17%
Market shares have been fairly stable – except in Asia where markets have highly developed in the recent years versus Japan for instance
Global Stock Market Trading
Where trading occurs is related to where equity is capitalized (e.g. US biggest capitalization & NYSE biggest exchange).
Total trading volume more or less stable. 2009: 75.3 to 2020: 91.4 trillion USD
Changing Global Stock Markets - NYSE
What ? Why?
1) New development of new market places/platforms (BATS exchange = ”Alternative Trading Systems”, electronic communication networks) which have managed to pick up significant market share
2) Shift to different markets of previously minor significance (e.g. Shenzhen SE)
Bid Definition
buy offer (# securities the buyer is willing to buy at what price) --> bid price = highest price a buyer is willing to offer for a security
"Ask" definition
sell offer (# securities the seller is willing to sell at what price) --> ask price = lowest price a seller is willing to accept for a security
Name the ways to place orders
- Market Orders
- Price-Contingent Orders -> limit orders & stop orders
What is a market order?
Buy or sell orders that are to be executed immediately at current market prices
Complications with market orders
Limit orders?
Place an order specifying the price at which they are willing to buy or sell.
Limit buy order: order to buy if and when the price of a stock is at or below a specified amount.
Limit sell order: order to sell if and when the price of a stock rises above a specified amount.
Stop order?
A sell order to be executed if the price of the stock falls below a specified level (aim: to set a maximal downwards risk, so if there is a crash, the securities are sold before their price drops “limitlessly”)
A stop-buy orders -> a stock should be bought when its price rises above a limit. These trades often accompany short sales (used to limit potential losses from the short position)
To perform market transactions, which transaction costs exist?
Global Debt Market Capitalization
(Japan has a smaller corporate bond market and a larger gov. bond market)
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