Investors to sue Moscow Exchange over stoppage of WTI oil trading - page 4
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The exchange is responsible for the settlement, not for the opportunity to buy/sell itself. If you buy/sell and are unable (for whatever reason) to reverse the transaction by the deadline, the exchange will settle the buyer/seller on time at the price of the underlying asset. The initial buy/sell of the futures is a self-sufficient transaction.
Is this official data or your personal opinion? ) The exchange was invented to trade assets continuously, so that they could be freely bought/sold at any time. That is its purpose. In this case, it has not fulfilled its obligation. And again, the futures is a product of the exchange. The clients were not buying oil, they were buying a specific product of the Moscow Exchange. The Moscow Exchange offered them its product and it is obliged to support and maintain it, namely - to provide free trade in this asset.
In any case, it does not make much sense to talk without having specific legal documents. One has to look at what is spelled out in the regulations. But I think people are not going to court with unsubstantiated accusations.
So far, all that is clear is that the exchange software was not prepared for such a scenario. Personally, this is surprising, because western exchanges, for example, are full of instruments (above all calendar and intermarket spreads) which are traded at both positive and negative prices. Why our marketplace did not take these opportunities into account is unclear.
Is this official data or your personal opinion? )
Official data is only on the official website of the official body - the rest is all private opinion
Is this official data or your personal opinion? ) The exchange was actually invented for the very purpose of trading assets continuously so that they could be freely bought/sold at any time. And again, the futures is a product created by the exchange itself. The clients were not buying oil, they were buying a specific product of the Moscow Exchange. It offered them its product and has an obligation to maintain and support it, namely, free trade in this asset.
In any case, it does not make much sense to talk without having specific legal documents in front of you. You need to see what is written in the rules. But I believe that people are not going to court with unsubstantiated accusations.
What is clear so far is that the exchange's software was not prepared for such a scenario. But this can hardly be regarded as force majeure. For me personally, it is surprising, because western exchanges, for example, are full of instruments (primarily calendar and intermarket spreads), traded both at positive and negative prices. Why our marketplace did not take these opportunities into account is unclear.
So, when I started to understand what was going on, I stopped trading.
The wording of the exchange's functions and responsibilities in your statement raises a lot of suspicions (and not necessarily being paranoid).
1. What is the"product created by the exchange itself"? The exchange is not supposed to create derivatives. An exchange is a trading floor, where buyers and sellers find each other and make transactions. That is the limit of its original function. No more than that.
2. If the exchange issues its ownfinancial contracts, assigns them a value and distributes them among the masses, the exchange isthe first and main stakeholder and beneficiary of the action.
3. if the so-called"exchange-traded futures" is a product of the exchange itself, then all trading of this product on its floor is a circus, organized around speculators, because the exchange-traded futures have nothing to do with the real futures contract.
4. If the exchange produces something for traders -it loses its neutrality and has no right to approve its own rules, because it is an interested party.
Therefore, I hope you are wrong.
I don't understand a lot of things, but why didn't traders set them?
or they just did not work?
If there were no stops, what complaints?
Yes quite simple. The man trades without leverage. He could not even dream that the price would go down and he would have to deposit more money to keep the position. So he knows that the position is fully paid, he can expect to close it in the long run. But here
1. What is another"product created by the exchange itself"? The exchange is not supposed to create derivatives. An exchange is a trading floor where buyers and sellers find each other and make deals. That is the limit of its original function. No more than that.
2. If the exchange issues its ownfinancial contracts, assigns them a value and distributes them among the masses, the exchange isthe first and main stakeholder and beneficiary of the action.
3. if the so-called"exchange-traded futures" is a product of the exchange itself, then all trading with this product on its floor is a circus for speculators, because the exchange-traded futures have nothing to do with the real futures contract.
4. If the exchange produces something for traders - it loses its neutrality and has no right to approve its own regulations, because it is an interested party.
Therefore, I hope you are wrong.
I may have used the word "product" incorrectly and this caused confusion. It was not that the exchange sets the price of contracts or sells them. It only creates those contracts and ensures that they can be freely traded. And yes, it is the main beneficiary of the action. Its only interest is in commission, not in what you think.)
I may have used the word "product" incorrectly, which caused confusion. The exchange does not set the price of the contracts or sell them. It only creates these contracts and makes them freely tradable. And yes, it is the main beneficiary of the action. Its only interest is in commission, not in what you think.)
You know, the question of the role of the stock market in modern trading has occupied me for many years. Some clever uncles have invented something, others have understood it as best they could, and I want to understand what is real.
And so, point by point:
1. The classic understanding of the stock exchange - a trading floor of speculators, registered in the organization and earns on commission.
2. The function of the exchange is an intermediary one. Internally, it can be divided into several constituent institutions (clearing house, trading pit, depository, etc...).
3. The modern world has made everything electronic (virtual). Now, there are electronic trading floors, electronic contracts, electronic money, etc...
Question: Does the exchange, holding electronic trading platforms, qualitatively differ from the classical exchange? Has technical progress distorted its essence? Has it become something else?
Your statement that the exchange issues futures contracts, which it sells to traders, MORE THAN that:"The exchange was actually invented precisely for the purpose of continually trading assets so that they could be freely bought/sold at any time. "It suggests that the original semantic "core" of the exchange, unofficially, was replaced by someone and now we are dealing with a completely different exchange.
Why? Why, all of a sudden, an exchange has become a provider of its own speculative objects?
1. Nothing REAL can be freely bought/sold at any time! Anything REAL cannot be bought or sold at any time. Especially when it comes to a legally formalized contract between real persons, around a real commodity.
2 The legal basis for exchange-traded futures contracts is lame on both feet. No holder of an exchange-traded futures contract bears any responsibility for meeting deadlines, payment or delivery of the commodity. The futures "fly" between the holders and no one worries about meeting the contract. So - an exchange-traded futures is something else, also named. The question is: what is it and where did it come from?
3. Who and by what right issues exchange "futures" and calls them futures? The stock exchange? What right does it have to do this?
These are only some of my questions.
Question: Is the exchange holding electronic marketplaces qualitatively different from the classical exchange? Has technological progress distorted its essence? Has it become something else?
I think it is basically the same, the world has not changed. There are buyers, there are sellers, and there is a market. Only everything is happening faster, the range has expanded (especially the number of derivatives), and trading volumes have increased. But in any case, hardly anyone has traded on "classic exchanges" here, so there is nothing to compare it with.
Your statement that the exchange issues futures contracts, which it sells to traders,
The exchange offers, not sells. And they trade with each other. 3.
Who, and by what right, issues exchange-traded "futures" and calls them futures? The stock exchange? What right does it have to do this?
Maybe God, but that's not certain.
Derivatives trading is liability trading. It doesn't matter if it is a futures or an exchange. This is how the whole financial world works. And it wasn't invented yesterday. Any liability = an asset.
...
Derivatives trading is liability trading. It doesn't matter if it's a futures or an exchange. The whole financial world is structured this way. And it wasn't invented yesterday. Every obligation = an asset.
But speculators in "futures" have no obligation to anyone. That is why I ask, what kind of futures are these that don't bind the parties to anything? A futures for a bearer with no obligations and no right to receive or deliver? This is bullshit...
In this case we are talking about settlement futures.
In this case, we are talking about settlement futures.