【文章內(nèi)容簡(jiǎn)介】 direct – Freidman, Billings, Ramsey Group – E*Offering – OpenIPO – EInvestmentBank – Wit Capital ?Vary in size and sophistication Francis Ibbotson 27 Chapter 6: The Global Stock Market Full Disclosure ?In . the SEC requires most primary issues be acpanied by a prospectus – 10 to 20 page document that fully discloses, among other items ? Purpose for which the proceeds of the issue will be spent ? Offering price to the public ? Offering price for special groups, in any ? Underwriter’s fees ? Net proceeds to the issuer ? Information on the issuer’s products, history and location ? Names and remuneration of officers ? Detailed statement of capitalization ? Detailed financial statements ? Details about any pending litigation Francis Ibbotson 28 Chapter 6: The Global Stock Market Full Disclosure ?Approval of a prospectus by the SEC does not mean the investment is a good value, but that all the necessary information required by the SEC has been disclosed ?Full disclosure allows investors to estimate value of new securities Francis Ibbotson 29 Chapter 6: The Global Stock Market Secondary Market ?Once securities are issued in the primary market, they can begin trading in the secondary market ?Types of secondary markets – Organized exchange run by dealers (NYSE) – Electronic market in which dealers pete with one another (Nasdaq) – Electronic munication works Francis Ibbotson 30 Chapter 6: The Global Stock Market NYSE Francis Ibbotson 31 Chapter 6: The Global Stock Market NYSE ?Each stock traded on the NYSE is assigned a specialist who must – Continuously post bid and ask prices for the stocks in which they make a market – Stand at assigned posts on the trading floor – Act as marketmakers (dealer) ? Always ready to buy at their bid price and sell at their ask (or offer) price – Invest their own capital (risky) but may earn a return – Execute orders for others (broker) – Earn the bidask spread on every transaction Francis Ibbotson 32 Chapter 6: The Global Stock Market Decimalization ?A tick represents the minimum amount by which a price can change – Prior to 1997 the tick was 1/8 but then became 1/16 ? However the tick size is now 1162。 since the exchanges instituted decimalization – Expected to reduce the bidask spread and trading costs Francis Ibbotson 33 Chapter 6: The Global Stock Market NYSE Listing Requirements ?To be listed on the NYSE must have – A minimum taxable annual ine of $ million – A minimum tangible assets of $18 million – A minimum of million shares of publicly held stock with a minimum market value of $18 million – A minimum number of 2,000 investors owning roundlots (100 shares) – One specialist Francis Ibbotson 34 Chapter 6: The Global Stock Market NYSE Operations ?Approximately 460 specialists with about 8 stocks assigned to each specialist’s trading post ?About 1,500 trading booths with telephones surround the perimeter of the trading floor – Allows for order transmission and confirmation between brokers’ offices and exchange floor ?NYSE has 1,366 members who must own a seat on the exchange – Almost all members are either specialists or floor brokers Francis Ibbotson 35 Chapter 6: The Global Stock Market Floor Brokers ?Buy and sell securities for the clients of brokerage houses or for their own accounts ?Order process – Broker receives order via phone from the brokerage – Walks to trading floor and executes transaction at the specialist’s post – Phones brokerage and provides confirmation Francis Ibbotson 36 Chapter 6: The Global Stock Market Specialists ?Accepts obligation to make a fair and orderly market by – Selling shares out of their own inventory if there are more buy orders than sell orders (or by raising the price of the security they control) – Buying shares for their own inventory if there are more sell orders than buy orders (or by lowering the price of the stock) ?Keeps a limit order book (LOB) for each stock in which they make a market Francis Ibbotson 37 Chapter 6: The Global Stock Market Limit Order Book ?Today is kept on a puter ?Records buy and sell orders from potential traders – Outlines the supply and demand curves that determine market price of security ? Helps specialists earn trading profits BID: $42 and ?/8 0/8 4 Wentz 9 Mirandi 3 Dalton 1/8 1 Sullivan 4 Jacoby 1/4 3 McGovern 3/8 2 Gabelli Francis Ibbotson 38 Chapter 6: The Global Stock Market NYSE ?NYSE has lagged behind other anizations in terms of technology ?Uses Super Designated Order Turnaround (SuperDOT) system – Routes small market orders and limit orders directly from member firms to specialists ? Bypasses floor brokers ? Specialists usually let PCs execute SuperDOT transactions automatically Francis Ibbotson 39 Chapter 6: The Global Stock Market Block Trades ?A single transaction involving 10,000 or more shares ?Increased steadily throughout the 1960s1980s but leveled off in the 1990s ?Specialists are not involved in block trades that occur outside the NYSE by block positioners – Special brokers/dealers that line up multiple buyers for a large block – Some large investment banks have a block positioning department ? Have the capital to carry a large block for a few days and the connections to distribute it ? The upstairs market – Economies of scale lead to small missions per share Francis Ibbotson 40 Chapter 6: The Global Stock Market Nasdaq Market ?Electronic, overthecounter (OTC) market ?Lists over 15% of the world’s stock market capitalization – Over 6,400 mon and preferred stocks – About 320 foreign stocks – About 140 ADRs Francis Ibbotson 41 Chapter 6: The Global Stock Market Nasdaq Market ?National Associatio