Discussion of article "Principles of Exchange Pricing through the Example of Moscow Exchange's Derivatives Market" - page 2
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Explain to me, the dark one, why in the 21st century clearing and all the inconveniences associated with it?
Is it technically so difficult to keep track of clients' obligations, the current rate of profit conversion, and everything else, online?
Ok, let it take some time to aggregate trades of different clients and register them.
Ok, let the exchange of ruble to dollar or back can also take time and slip.
But why wait until the evening? Why can't all this be done upon execution of the trade (albeit with a slight delay)?
I feel like I don't know something basic. Is this the way all exchanges work, and the transition to online will only happen in the 22nd century?
Heavy legacy of the 90s. Plus the historical originality of the Russian stock market. As far as I understand, stock exchange technologies were initially strongly intertwined with the Quik client platform and the platform itself with the exchange. Over time, it suddenly turned out that it was impossible to just start from scratch. Too much would have to be changed, both on the client side and on the exchange side. Here is an interesting article about how it all started.
Clearing is a third party. I don't know if they even have access to track trades in real time.
On the other hand, I'm not sure if it's even realistic, without interfering with anyone and without errors, to "make ends meet" in real time during transactions by participants.
I.e., it is, after all, netting. Not just read and count, but also record.
In general, I don't think it's a platform issue. Rather, a few fundamental legal and technical points that do not allow to do otherwise. That's the way it is.
Clearing is a third party. I don't know if they even have access to track trades in real time.
On the other hand, I'm not sure if it's even realistic, without interfering with anyone and without errors, to "make ends meet" in real time during transactions by participants.
I.e., it is, after all, netting. Not just read and count, but also record.
In general, I don't think it's a platform issue. Rather, a few fundamental legal and technical points that do not allow to do otherwise. That's just the way it is.
Plus.
"Here you are not there!":))))
Perhaps the principled two-sidedness of transactions and legal points make such an organisation the only possible.
I mean, nobody knows for sure.
It's understandable that it's a legacy. It's understandable that it's technically more complicated. I don't understand why they don't.
Do other exchanges suffer from this?
American exchanges have clearing. And since there are several sites physically separated, accordingly, there are several clearing houses.
Hence, it is impossible to give real-time information on OM, etc. for futures. This information is given the next day - therefore, its value for intraday trading is zero.
So, our stock exchange, in this sense, gives a hundred points ahead for trading))
Thank you.
I guess it's really not that easy to get rid of it.
We'll get used to it.
It doesn't occur to anyone (and is unlikely to occur to anyone) to get rid of it.
It is business. Historically, the buyer-seller is agreed upon first, and then only the cash desk, accounting, collection, and spongers. Even if the seller/cashier is the same person. And at the stock exchange, they are different.
American exchanges have clearing. And since there are several sites physically separated, accordingly, there are several clearing houses.
Hence, it is impossible to give real-time information on OM, etc. for futures. This information is given the next day - therefore, its value for intraday trading is zero.
So, our stock exchange, in this sense, gives a hundred points ahead for trading))
Thank you.
I guess it's really not that easy to get rid of it.
We'll get used to it.
It doesn't occur to anyone (and is unlikely to occur to anyone) to get rid of it.
It is business. Historically, the buyer-seller is agreed upon first, and then only the cash desk, accounting, collection, and spongers. Even if the seller/cashier is the same person. And the exchange has different ones.
It came to me. And many others, I'm sure, have too.
Markets have also transformed into shops, and shops into supermarkets. It's a matter of time.
And someone (the market director) didn't need it, that's a fact. But capitalism won ;)
Don't see clearing as evil. On the contrary, clearing is a very competent and most importantly transparent solution. As it was rightly noted, clearing allows us to make a decision lightning fast and conclude a deal, while the complex calculation itself is pushed back in time. Thanks to clearing, we know exactly at what rate we are quoted and at what prices our obligations are closed. This is more difficult to achieve in real-time. A simple example, having made a deal on some cross rate CADJPY, it is very difficult to calculate the value of a point of this instrument retrospectively. In clearing such a situation cannot be.
Where is the lightning speed and correctness? On the contrary, I remain in the dark until it (clearing) comes.
Opening on CADJPY, I can know in advance the necessary margin (liabilities), and at every moment of position life I can know what profit I have in the currency of my deposit.
What would happen if I only received the cross conversion rates in the evening? What if tomorrow? And if on Friday, or on the 31st?
Everything is clear about the technical complexity, but is it really only about it?