Stock features
From the stock exchange practice can be seen from the Stock Exchange will help ensure that the stock market for continuity of operations, to achieve effective allocation of funds to form a reasonable price, to reduce the risk of securities investment, linking long-term and short-term market interest rates. However, the stock exchange may also have the following negative effects:
1. Disrupt the financial price. Because a large part of stock exchange trading is only sold and bought back, so in the stock exchange, securities trading turnover are great, but the actual delivery is not significant. Er Ju, as such transactions are not in fact represent real trading of financial assets, its supply and demand form part has not reflect the actual conditions of their Keneng disruption in the financial Jiage Yidingchengduo Shang.
2. Vulnerable to effects of false news. Stock on the types of information are particularly sensitive. Therefore, if someone deliberately spread false information, or submitting a false financial situation, or to spread false and some political movements, and so on. Exchange price changes can result in severe, some speculators will suffer great losses, while others may be large gains.
3. Engaged in improper trading. Engaged in improper transactions, including trade matching, virtual throw and eat regularly in trade transactions. Match the transaction is in many ways traders were commissioned by two brokers, according to price fixing by the party to buy, the number one selling the same kinds of securities, to elevation or depression of the normal price of securities. Virtual trading is the trader throw intentionally thrown high price of securities, while another broker for the acquisition of pre-Well, and all agreed the burden of loss remain with the seller, the result is likely a false prosperity of the securities. Join as a partner is defined as two or more trading partnership to fix prices, once the purpose has been achieved, join as a partner who shall be dissolved, including the transaction eat regularly (those who eat regularly in secret in the open market or interested in buying their securities in order to avoid raising the price of these securities, or by walking down the company’s bad news for stock prices of its wish to buy) and option join as a partner (by enabling investors to buy securities, usually obtained through open up the company’s board of directors, the general is part of the private return to profit to the Director).
4. Insider stock manipulation. Because the management of power companies are controlled by large shareholders, so these people could spread the company’s profits through the payment of dividend and expansion plans, acquisitions, mergers and other information manipulated stock prices; or direct use of insider information for profit, such as help the company announced the news of rising stock prices before buying secret, so that when the high throws; if the company will announce the bad news, then secretly throw before the announcement, then buy low after the announcement.
5. Stock brokers and exchanges of staff cheating. Transactions in the stock exchange, stock brokers, and shift the cheating may have (ie on behalf of the customer while buying while selling, or intentional tension to persuade customers to buy or sell quickly, so that it can from each transaction by commission ), occupying commissions, false price, which traded without authorization of funds to customers for their own profit, or non-compliance in order to make false customer transaction compensation. Exchange of staff cheating ways may have: their own illegal conduct in secret stock trading, while stock brokers stock brokers with the collusion or secretly shared in stock.