Look at our short review about how to start trading on Moscow Exchange. Let's talk about what the MOEX is and discuss what to do to prevent your trade from horror of harsh reality. How the process of trade looks. Which terminals are better to use. Who are the best brokers. Which sections MOEX includes. What is FORTS (futures and options market in the Russian Trade System) and why the monopoly is damn bad.
2. Moscow Stock Exchange
3. Stock market
4. Derivatives market
5. Currency market
6. Money market
7. Precious metals
8. How to start trading
Recently, I often write about how become a successful trader. But I escaped the discussion of trading platforms. Which, in fact, is a place to start. You’d better understand what and where you would trade. Which areas are closer to you, and which of them you are ready to learn.
This is a very important decision. It’s practically like how to choose a wife or even a religion. When you do it (or someone does it for you) it's once for all time. There's no way back.
It happened to me on its own and I was lucky to get interested in futures. At that time we had a platform called RTS, where derivatives were traded. This is where I started.
That was 2011. By that time, I had enough information about what Forex is and why I should not start with it. But still, I'm sure that I was just lucky not to get there.
Moscow Stock Exchange is a financial holding company that manages the largest multifunctional platform in Russia, which represents stocks, bonds, derivatives, currencies and commodities.
Moscow Stock Exchange was formed recently, in 2011, by merger of MICEX and RTS platforms. Once the irreconcilable competitors, knocking each other's prices down – they decided to become a single legal entity. Unexpectedly! This deal was approved by the antimonopoly committee, which caused a negative reaction of speculators.
In the stock market, you can trade with shares, federal loan bonds, regional and corporate bonds, eurobonds, depository receipts, investment shares, mortgage certificates.
This section is nominally divided into two categories according to the types of instruments admitted to trading:
1) Shares and units
This section of MOEX is of great demand among investors. Companies’ shares are bought and sold here. Initial public offering of companies’ shares happens here too. As well as their absorption and merger.
A residence of speculators and algorithmic traders. A place for trading with derivative financial instruments. Futures and options.
Here you can buy and sell futures for stocks, currencies, indices. A wide range of options is also available.
It is popular for several reasons:
1) This section has one of the lowest commission fees.
2) The methodology for reserving funds for transactions allows customers to buy / sell more positions than the value of their portfolio. In some cases it allows to buy 10 times more contracts than available funds on your account. This is very important for speculators.
After the last sharp drop in the ruble exchange rate, in 2014, the section continues to grow and shows record volumes.
The following currencies are presented:
The main tradable pairs:
• USD / RUB
• EUR / RUB
Several types of REPO operations are available, as well as depository and credit operations from a number of organizations.
The main participants of this market are banks. This place is not for an average speculator.
Since 2013, transactions for the purchase and sale of precious metals are available. Gold and silver. This is the youngest and smallest section.
For an individual, the only way to trade on MOEX is to conclude a contract with an organization that has permission to do so. With the broker. Usually these are large banking organizations, but not only them.
When choosing a broker, you should pay attention to:
1) the volume of trades passing through a broker;
2) the fee.
In this sequence. This is sad, but the Central Bank periodically withdraws licenses from small brokers. They go bankrupt and close. But in contrast to deposit, the brokerage account is not legally protected. Therefore, if you choose a broker without looking at its value, there will be quite a real chance to loose your deposit.
In general - choose brokers from the top ten by the volume of trading, and it’ll be fine.
The most obvious solution for trading through a broker is the Quik terminal(http://arqatech.com/en/products/quik/).
Briefly about why Quick is worth mentioning:
1) This project is popular and profitable. Accordingly, it is in the process of development and will continue to grow.
2) Most brokers support this technology. This means that if you want to change the broker, you won’t have to study another terminal.
3) It has a wonderful scripting language for writing robots.
You should choose a section for your tasks.
If you want to buy some shares of Sberbank or Gazprom, you should definitely go to the stock market.
Once you’ve bought a paper, it will be kept on your account without requiring any additional expenditure from you.
Despite the lower fees for a single transaction, long-term investments are not very reasonable in derivatives market. Derivative contracts, like futures, have expiration date, and you would constantly be shifting series until it comes.
The derivatives market will be interesting if you want to often enter and exit positions, counting on faster profits from transactions. "Shoulders" here are completely different. There are opportunities for more aggressive trade.
In general, do not rush to choose the section, think about what and how much you would trade.
I hope this post was useful and I managed to tell you something about what MOEX is and how to make your first steps here.
And, traditionally, a minute of depression.
There were two platforms in Russia – RTS and MICEX. There was competition between them. It was perfect for people. Could you imagine the time when tariffs were going down? The only thing that comes to my mind is cellular service. We had the same with trading: services were improving, prices were falling.
Speculators were in seventh heaven with happiness.
Now a series of tariff increased and a motivation to improve services dropped.
This is how it goes...
Have good algorithms!