How is exchange trading in Russia

    We often hear news about what is happening on foreign exchanges. The London Stock Exchange and NASDAQ seem to be familiar even to web users far from exchange trading. Often this news tells about the successes of foreign financiers, in particular in the field of technology - records of transaction speed, productivity, or, conversely, hardware or software failures. As a result, it seems that foreign sites are the most technologically advanced in the world.

    What about us? In addition to repeating from year to year the words about the need to create an international financial center in the country, it would seem that there are no special gestures in this area. On the one hand - this is so, on the other - the domestic stock market is much more interesting than it is customary to think about. And it is interesting, first of all, from a technological point of view.

    Stock Market Device Diagram


    We will move from simple to complex and, for starters, consider a somewhat simplified generalized scheme of the exchange industry of the Russian Federation.

    image

    Stock exchange


    The main element of the system is, in fact, the exchange itself - the platform on which the purchase / sale operations are performed. At the same time, when it was possible to meet vocal brokers on the stock exchange who shouted out the best price offers, they are a thing of the past.

    Now all the main activity of the exchange is carried out in data centers with powerful servers that host the core of the trading system and software for all kinds of accounting.

    Previously, there were two large exchanges in Russia - MICEX and RTS, but in mid-December 2011 they merged (in fact, RTS was absorbed by a competitor). The resulting site was first called the MICEX-RTS, and then received the more harmonious name “Moscow Exchange” (Moscow Exchange).

    image

    This, the largest domestic exchange, trades in securities, currency, futures, options, gold, shares of exchange-traded funds and other financial instruments. Another worth mentioning is the St. Petersburg International Commodity and Raw Materials Exchange, which trades in oil, oil products and futures on them.

    In Russia, as well as abroad (the DowJones index is familiar to everyone), there are stock indices: the RTS Index and the MICEX Index , as well as indices of various industrial sectors (the so-called industry indices). The most popular and interesting from a technological point of view is the derivatives market, there are also currency, stock and commodity markets.

    Brokers


    An ordinary person cannot simply trade directly on the stock exchange - this is how the legislation of all countries is organized and ours is no exception. To make transactions with securities or other financial instruments, you must use the services of an intermediary - a broker who has access to the right market. It is to the broker that customers carry the money, open accounts with him and give him instructions to complete a particular transaction. That is, you, using the trading terminal or by voice over the phone, ask the broker to buy such and such paper for you. And this application is sent to the exchange, but on behalf of the broker, who then, in his own system, will calculate your profit or loss on the transaction.

    The infrastructure of brokers deserves special mention. First of all, in order for the application to get on the exchange, it must be sent there. For this, special software is used - exchange gateways, which accept applications sent by users using trading terminals via the Internet, connect to exchange gateways and transmit data to them and, in passing, write them to the database.

    Much attention is also paid to security: each transaction must be authenticated by the user, for this, when trading online, an electronic digital signature (EDS) is used, which brokers must integrate into their products. Typically, the “signature” of transactions occurs once a month, when the user is provided with an electronic report that he certifies with his key.

    In addition, according to the law, the broker is obliged to report to the client on completed transactions, therefore, a powerful back office is also required. The issue of hardware is also noteworthy - for example, when developing the new ITinvest trading system, we used IBMDataPower products , which we will discuss separately in one of the following articles.

    Customers


    The stock market unites different categories of traders: here are professional traders with many years of experience, and beginners, and technologists who rely on special trading algorithms.

    image

    In addition to the professional background, all traders are distinguished by a commitment to one or another trading style, which is expressed in the way they open and close positions (complete transactions), the duration of holding positions, and so on:

    • A day trader (day trader) makes transactions mainly within one trading session and does not leave “open positions” (for example, unsold or unredeemed securities) for the night, fearing changes in market conditions and unpredictable price fluctuations while the exchange is closed or not on the market.
    • Scalpers make many trades within a short period of time: from a couple of seconds to several minutes. The profit from each such transaction is usually small. the price does not have time to change much, which implies a large number of operations.
    • Position traders make transactions that are average in duration, disposing of assets before periods of reduced liquidity (e.g. holidays).
    • Medium-term traders carry out several operations per year.
    • Transactions of long-term investors can last for several years, and they close them only when global trends in the market change.

    In online trading, the first three types of traders are mainly found. At the same time, day traders and scalpers are usually ordinary market participants, and various funds and financial institutions adhere to positional, medium or long-term strategies.

    What trade


    In general, traders on the exchange can be divided by the type of software used. Some trade manually using trading terminals, both universal Quik type, and available only when working with a particular broker (e.g. SmartX), others use special programs for trading - trading robots that implement the trading strategies laid down in them.

    image

    Mobile devices are also used for trading and viewing exchange data.

    Many brokers open access to their systems for third-party developers through the API, which positively affects the number of various programs and applications for online trading. In addition, using the API, each client can develop their own trading robot that implements a unique strategy for market behavior.

    By the way, if you suddenly had a desire to try it yourself, to trade on the exchange, then this can be done quite safely thanks to the integrated exchange service called test access . The user is given a virtual account, virtual money, and the ability to use real infrastructure - including the brokerage API.

    That's all for today. In the following articles, we will consider in more detail topics such as the API of brokerage systems, the importance of the speed of processing applications and direct connection technologies (bypassing brokerage systems), financial transfer protocols, and much more. Follow the announcements!

    Also popular now: