Quotes of stock exchanges are announced on federal channels, figures reflecting the results of trading, are full of all over the Internet. The thing is that these indicators are important for the Russian economy. Our fellow citizens should not have questions like: “RTS Index - what is it?” A culture of knowledge about stock exchanges is very important for the development of the whole society. Moreover, this information is interesting and entertaining in itself.
Briefly about stock indices
In the modern sense, the stock index is an indicator of the effectiveness of sales of securities and other assets in a particular market (most often, in a separate state). Very often, quotes can characterize the state of the economy of a country or its segments and industries. For example, the calculation of the RTS index (about this exchange in more detail below) was carried out on the basis of the situation in the largest companies in the oil industry and industry. Some traders believe that the indices in the dynamics are of decisive importance, and not their current values.
Stock indices are displayed on specialized trading floors-exchanges according to one of the common formulas. Firstly, it can be the arithmetic mean calculation of the "unweighted" type. In this case, the value of the assets is summed up and divided by the denominator determined by the analysts of the exchange. Secondly, the arithmetic mean calculation of the "weighted" type is practiced, when the price of assets is calculated by samples. Thirdly, this is the geometric mean derivation of quotes with a significant interval (usually every three months). As a rule, in all cases, quotes are visualized. Examples are a chart of the RTS or MICEX index.
RTS and MICEX. Exchange merger
In Russia, stock quotes until 2011 were displayed on two main exchanges - MICEX and RTS. The main distinguishing feature of each of them was the origin. MICEX created banking organizations, and the work of this exchange, experts believe, was organized in the interests of these structures. In turn, RTS was founded by financial brokers, and this also affected the specifics of the development of this site. She, according to many traders, was advanced in terms of technology. Among analysts, there was a special opinion about the specifics that the RTS index contains: it is the result of trading that appeared due to the use of the best equipment and programs. The MICEX has thus become a place for trading corporate securities and government shares. At the same time, some experts called this exchange conservative (in comparison with RTS) and poorly amenable to modernization.
At the end of 2011, the two exchanges merged, and a single list of securities traded on the new platform was formed. Companies whose listing was on the former RTS were listed Classica and RTS Standard. In turn, in a sector called the “main market”, the assets of the former MICEX began to be traded.
RTS Index: Facts
Calculation of indices on the RTS stock exchange has been carried out since 1995. Initially, there were 13 types of securities. Trade began to develop rapidly, and the stock portfolio gradually grew several dozen times. Businessmen very quickly realized the benefits of the RTS index, which is a great tool to attract capital. The largest value of the RTS trading portfolio was recorded in 2008 at about 2500 points. The largest share in quotations belonged to the largest Russian corporations (Gazprom, Lukoil, Sberbank), as well as to such structures as Rosneft, VTB, Surgutneftegaz. The RTS index chart, as a rule, reflected the real situation in all these businesses.
MICEX Index: Facts
The MICEX index began to be calculated in 1997 on the basis of the results of trading in securities held daily. The main feature of trading on this exchange, according to some analysts, is that quotes were calculated according to stock prices in rubles.
This is due to the fact that the MICEX and its closest Russian "competitor" RTS indices could show completely different dynamics with changes in the ruble exchange rate on the currency exchanges against the dollar. The bulk of trading operations, which reflected the MICEX and RTS indices, were always formed by the same structures - oil and gas companies, major banks and industrial enterprises.
What are futures?
Futures are bilateral agreements between financial market participants that a certain transaction will be completed within a specific time period. When the agreed date and time comes, one side sells the asset, and the other buys. An interesting fact is that futures are not goods or securities. This tool in its modern form appeared solely due to electronic commerce and the ability of brokers to register virtual agreements between traders. In futures, there are two main parameters - the asset and the term of the contract.
There are additional terms of the transaction, for example, “tick” (the interval of a possible change in value), the amount of collateral, the limits of price changes. Many traders agree that futures trading is a very effective tool for making profit with the proper level of risk management. With unsuccessful transactions, losses can be very noticeable. But, in turn, if the contract is successful, then the trader can earn an impressive amount. The main thing, as some financiers believe, is to determine what the futures chart indicates. The RTS index (what it is, we found out), in particular, is affected by the situation in the largest corporations in the country, and the conclusion of transactions based on their securities requires a balanced approach by the trader in assessing market segments.
RTS - once the best platform for futures?
Some traders believed that RTS was one of the most convenient exchanges for futures trading. They determined their choice primarily by the fact that on this site there were conditions for effective “hedging” (insurance) of risks. A trader could choose benchmarks, forming an offer for profitable futures: on the RTS index of any company or on the arithmetic mean value of quotes. According to financiers, the RTS index was recognized at the official level, so the sale of futures on the exchange was characterized by high liquidity. By the way, stock quotes are a pretty clear indicator of the real situation in the Russian economy.
Concluding deals on RTS futures, traders paid the difference between two indicators - the assessment of the contract and the cost of its execution. An important parameter in the course of work with futures is the average value of stock quotes, which is fixed at the close of trading. Almost all traders had access to mutual contracts on the RTS, even if their capital was small (though in this case they would have to turn to brokerage organizations). Thus, among financiers, for a long time, it was believed that the optimal environment for trading futures is the RTS index, that this is an adequately balanced financial indicator.
What did the MICEX quotes depend on?
Before the MICEX merged with RTS, traders conducted trading on it, but taking into account some features. Analysts note that the indices on this exchange consisted mainly of the portfolio of the largest, most liquid corporations in Russia. The main feature of the MICEX exchange, according to experts, was that quotes were set in rubles. Many financiers considered the index of this financial institution to be the main one on the Russian stock market. According to their estimates, in certain years about 90% of the turnover of Russian shares accounted for precisely the MICEX. The change in quotations on this exchange, as some analysts believe, mainly depends on the situation in such companies as Lukoil, Rosneft, Gazprom, as well as Sberbank. According to some experts, there were regularities that determined the dependence of the MICEX indices on foreign exchanges and events in the international arena. Some financiers have the opinion that the unified Moscow Exchange has incorporated many of the properties previously characteristic of the MICEX.
