The main open market operations are related to the implementation of the monetary policy by the state, one of the instruments of which are securities. The foundation of such a policy is the operations of the Central Bank related to the purchase and sale of government securities to influence the money market.
Operations on the open market are designed to regulate supply and demand for securities of national importance, cause a corresponding positive reaction in commercial banks. When the Central Bank sells such “goods” to commercial banks, the credit expansion of the latter is automatically limited, there is a decrease in the money supply in circulation and, thereby, the ruble exchange rate rises.
From economic history, he can see that the very concept of "open market operations" has been used since the 1920s in the United States. Already at that time, the operations of the Central Bank described above in America were widespread due to the presence of a large share in the country's economy of the corresponding market.
The open market policy is an instrument of flexible and quick impact, since the Central Bank, with the help of the proposed high interest rates on the purchase and sale of the Central Bank, actively affects commercial banks and the amount of their liquid assets, as well as manages credit issues.
By purchasing securities on the open market, it significantly increases the reserves of these commercial banks and there is an increase in money supply. This mechanism is very effective during the economic crisis.
Operations on the open market are also represented by stock trading, which is the process of transferring ownership of these securities both on certain trading floors and through the Internet. At the initial public offering (issue), the owners of the enterprise may receive additional funds to carry out its activities. Secondary turnover allows only to change the owners of shares, but the company no longer brings direct income. Using stock quotes, you can determine the real price of a business entity. When shareholders make a decision to expand the activities of their enterprise (enlarge it), an additional issue of shares may be carried out.
Today, the purchase and sale of shares on the stock exchange with the help of Internet technologies is very popular. The name of such operations is Internet trading. The procedure for performing this operation on the open market is much simpler than on a regular exchange. The only thing needed is the availability of special software and, of course, a computer connected to the Internet.
Among the types of operations on the open market, one can distinguish futures transactions that are associated with the transfer of rights-obligations for the supply-purchase of goods on the exchange. Unlike the conclusion of transactions on ordinary (real) goods, with futures only the rights to the goods are negotiated, i.e. its actual transmission and reception is not carried out.
A futures contract is the subject of such a paper transaction. This document defines both the rights and obligations to transfer or receive goods. It may also contain information on the procedure for such transfer or receipt. A futures contract cannot be related to securities. Another feature is the impossibility of canceling it just like that. It can be eliminated only upon delivery of the agreed goods within the time stipulated by the contract, or if an opposite transaction has been concluded with the same quantity of goods.
