Share
A security representing an ownership interest in a company and the rights connected with that interest.
Route · 38 · 38 terms
Markets
Market participants, trading infrastructure and settlement risk.
Path goal: Trace an instrument from issuance to execution.
Reading sequence
This editorial sequence preserves the Russian curriculum order and uses the existing translated guides.
Foundation
Core explanations: start here if the topic is new.
Why a financial market is needed: capital, liquidity and risk allocation
Primary financing and secondary trading, the role of price and infrastructure, and the limits of the market’s useful functions.
Issuer and identifiers: do not confuse a company with an issue
A legal entity, trading code, ISIN and registration number serve different purposes; a shared brand does not prove identical rights.
Exchange, clearing and settlement: why concluding a trade is not the end
The path from an order to an account entry, the roles of the broker and depositary, the spread, and the difference between a trading event and a settlement event.
OTC transaction: counterparty, price and settlement process
Why OTC does not automatically mean fraud or no clearing, and which questions determine other-side risk.
How to read a financial chart without the illusion of a forecast
Scales, intervals, candles, adjusted series and returns: what a chart shows and what it cannot prove.
Further connections
Additional concepts and practical connections after the foundation.
Broker and dealer: the role in the transaction matters more than the label
Agency execution, principal trading and embedded compensation explained through the trade confirmation.
Calendar spread: different maturities do not remove risk
How to decompose a calendar futures spread into two maturities, calculate each leg and check delivery, margin and basis movement.
Call and put at expiration: payoff is not profit
Buyer and seller profiles including premium, contract multiplier and asymmetric potential loss.
Chart patterns: from recognition to a testable rule
Define support, breakout or a pattern before seeing the result and test every match, including failures.
Markets as complex systems: feedback and the limits of forecasting
How interaction and adaptation change financial systems, and why causal models must be separated from vivid analogies.
Credit spread: the difference in yields does not equal the probability of default
How to choose a comparable benchmark, count basis points and
The wisdom of the crowd: when diversity helps and imitation hinders
When pooling scores helps, why is agreement not equal?
Custody chain: why nominal entry does not mean
Owner accounting, cumulative entry and corporate transfer
Default and debt recovery: why one word does not determine the loss
Recovery amount, timing and costs change the result; event probability is not loss given the event.
Currency exchange and CFDs: the same chart, different rights
Why receiving currency, settling a price difference, counterparty risk and the effect of small margin must not be collapsed into the word “forex”.
Fund net asset value and exchange price: why they are different numbers
Assets minus liabilities, value per unit, creation of new units and a secondary-market premium without a list of available funds.
Hedging: which risk is offset and which risk remains
Match the underlying flow and derivative contract while identifying basis, quantity, timing and interim-liquidity risk.
Index replication: why a fund can lag the right benchmark
Full and sampled replication, costs, tracking difference and variation in deviations, without ranking funds.
Intermarket and inter-commodity spreads: comparability first
How to compare related commodities and venues, align units and leg sizes, and understand why a historical relationship can break.
Financial history: learn from it without fitting it to today
How to compare historical returns while accounting for payouts, currency, institutions and markets that disappeared, without treating the past as a forecast.
Leverage and price gaps: how a loss can exceed own funds
Separate the borrowed amount, position value and residual capital after a sharp price move, without assuming guaranteed closing.
Liquidity depth: why the best price is not enough for a large order
Calculate an average execution price across levels, distinguish turnover from available size and understand the limits of a static snapshot.
Market capitalization and multiples: compare the right quantities
How to distinguish equity value from business value, choose a ratio denominator and test the limits of the comparison.
How to classify a market: four independent questions
Primary issuance, resale, funding term and execution term are different axes, not mutually exclusive labels.
Market efficiency: what the hypothesis says about information and price
Which information is assumed to be reflected in price, how to test the efficiency hypothesis and why it does not guarantee fair value.
Market and limit orders: what exactly constrains an instruction
Price, execution probability, partial results and validity period considered separately, without choosing a trading tactic.
Momentum and reversal: descriptive effects, not entry promises
Distinguish continuation from reversal, preserve the horizon and avoid turning historical effects into trading guarantees.
Moving averages: smoothing, lag and parameter choice
SMA, EMA and weighted averages on one synthetic series, with weights, lag and limits on conclusions from crossings.
Order book: why two best prices exist at the same time
How to read bid and offer sides, absolute and relative spread, and why the last trade is not necessarily an executable price.
MACD and RSI: what the indicator transforms and why a signal is not proof
How MACD, its histogram and RSI are constructed, which parameters change the result, and why an extreme value does not promise a reversal.
Power-law distributions: company size, concentration and the limits of extrapolation
How to read a power-law tail and rank distribution, check scale and avoid treating a straight line on a log plot as a law.
Rebalancing and behaviour: restore the rule, not a market guess
How to distinguish restoring an educational structure from changing the objective, compare methods and account for costs.
Netting and delivery versus payment: two different reductions of settlement risk
Offsetting obligations, cash needs and conditional security delivery explained separately from market performance.
Technical analysis: hypotheses, testing and the limits of evidence
How describing a historical series differs from forecasting, and what must be tested before calling a trading rule useful.
Trading frequency: infrastructure and costs across horizons
Which costs change with turnover, how intraday infrastructure differs from a long horizon, and how to test net results.
Volatility, gaps and trading halts: three different events
Why a price can jump across a level, historical variability does not cap a loss and a trading pause does not insure a position.
Volume and open interest: different measures of activity
How contracts traded differ from outstanding obligations, how to calculate open-interest changes and what OBV does not prove.
Yield curve: maturities, slope and a conditional forward rate
How to compare like maturities, distinguish coupon yield from spot rates and avoid treating a curve as a forecast.
Key terms
Ask price
The price at which a participant offers to sell an instrument in the order book under review.
Bid price
The price at which a participant offers to buy an instrument in the order book under consideration.
Bid–ask spread
The difference between the best displayed offer to sell and the best displayed offer to buy in a selected snapshot.
Exchange
An organized venue that sets rules for admitting instruments and conducting trading.
Order book
A display of visible offers to buy and sell an instrument by price and quantity.
Security
A financial instrument establishing specified proprietary rights and related rights of its holder.
Default
Failure to perform an obligation on the terms set by a contract or offering documents.
Dividend
A distribution of company funds to shareholders under a corporate decision and the terms of the relevant share rights.
Yield to maturity
A calculated rate linking a bond’s price with its scheduled future payments through maturity.
Duration
A measure of a bond’s cash-flow timing and sensitivity to yield changes; the type of duration must be specified.
Issuer
An organization or other authorized party that issues securities and assumes the related obligations.
Futures contract
A standardized contract for future delivery or settlement under specified terms.
ISIN: international securities identification number
An international identifier for a financial instrument, used to distinguish it unambiguously.
Clearing
Determining participants’ obligations after trades and preparing their execution, including netting where provided for.
Leverage
An increase in market exposure relative to one’s own funds that magnifies possible gains and losses.
Credit spread
The difference between the yield of a debt instrument and a selected comparable benchmark.
Yield curve
The relationship between a specified yield measure and maturity for a consistent set of instruments or calculation points.
Bond coupon
An interest payment on a bond whose amount and payment procedure are set by the issue terms.
Liquidity
The ability to sell an asset or meet cash obligations on time without unacceptable loss.
Limit order
An order with a price boundary: buy at no more than, or sell at no less than, the specified level.
Accrued coupon income — ACI
The portion of a coupon accrued between payment dates and accounted for under the terms of the particular transaction.
Bond
A debt security with payment terms defined by the issue documents.
Option
A contractual right to take a specified action in relation to an underlying asset on stated terms; the other party’s obligation requires separate assessment.
Open interest
The number of existing unsettled contracts at a given time, counted on one side of the obligation.
Bond redemption
Performance of the issue terms requiring the issuer to return the face amount or part of it.
Interest-rate risk
The risk that a financial instrument’s value or cash flows change when market rates change.
Derivative financial instrument
A contract whose value or payments depend on an underlying asset, indicator or event.
Trade settlement
Performance of obligations to deliver money and instruments within the prescribed time and manner.
Repo
Linked first and reverse legs of a transaction involving securities and cash settlement under specified terms.
Counterparty risk
The risk that the other party to a transaction will not perform its obligations under the specified terms.
Market order
An instruction to execute against available offers without fixing the exact final price.
Strike price
The price specified by an option contract for exercising the corresponding right.
Current bond yield
Annual coupon income relative to a selected market price of the bond.
Ticker
A short designation for an instrument in a particular trading or information system.
Tracking difference
The difference between a fund’s result and a selected index over an agreed period, with the sign and method stated explicitly.
Tracking error
A measure of the variability of the difference between a fund’s periodic results and an index; the estimation method and periodicity must be specified.
Over-the-counter market (OTC)
Transactions in instruments outside a centralized exchange mechanism, on the terms of the relevant market or contract.
Scenario checks
Fixed-coupon bond scenario
Explore coupons, payments and yield to maturity.