The Role of Stock Market Speculation: DEVELOPMENT -part 4-
Speculation and the capital market.
Much of the operation in the capital market, it is money that does not exist outside the market. It operates with money that is created by these operations. The broquers, traders, speculators, … capital markets and foreign exchange credit operations in the same way that credit gets formalized in the real economy.
Both the industry and trade, products and services are supplied continuously, but these products and services are billed periodically, in the same way that we get credit for utilities (telephone, water, electricity ,…) that but we continually consume billed periodically.
If an individual wants to buy stocks or currencies it is normal for the bank that handles the purchase prompted the prior deposit of the amount of the transaction or will require an authorization to debit the current account the amount of the transaction and verify that it has sufficient money, before the operation.
In the capital market operated in the same manner as in industry or commerce, and stock exchange agents allow some customers to operate continuously and operations are invoiced at the end of a given period (one month, a week, one day). Each invoice is settled only difference between purchases and sales for the period plus the costs of the operation. This allows large volumes of transactions and therefore, although they represent a risk not only accepted but sought after by companies and stock exchange and other financial intermediaries, because they report large commissions.
This operation involves a creation of money, that only exists for this purpose and has no material counterpart anywhere. This money financially interested by the application of telematics, who achieved a volume has been astronomical. A study of Maurice Allais … estimated at 38 times higher the value the financial volume of goods sold internationally, more recent studies say that already exceeded more than 60 times. The same is true of the operational stock exchanges, where the volume of speculative transactions is much higher than in investment operations.
credit to: Lic. Eyelin Bello Caballero, MSc. Yaicel Rangel Díaz and MSc.Eimyn Rizo Lorenzo
Source: www.gestiopolis.com/finanzas-contaduria/especulaciones-en-los-mercados-financieros.htm
image source: www.barcelonareporter.com/img_uploads/Spanish_stock_market.jpg