In this article we will tell you what stock exchange quotes are and why you need a marking sheet. This information will be of interest to novice investors who want to become participants in the exchange market and understand the issues of trading securities.
Quote: what is it
In simple words, a quote is a price tag on which the one who forms it indicates the securities available and the cost of their purchase/sale. The quote is affected by the current market situation.
Let's explain with a simple example: there are stores with expensive bread, and there are places where bread is cheaper. Accordingly, the quotation, like the price tag for bread in a store, exists so that the potential seller/buyer is familiar with the price in advance and can make a preliminary decision about the purchase.
On the stock exchange, quotes can be viewed in the quotation sheet — it indicates the companies whose securities are admitted to trading. If we talk about what types of securities quotes exist, then we are of the opinion that quotation sheets differ only in the format of their preparation and the assets that they cover.
The quotation is formed by the issuer (the one who issues it); accordingly, the method and principles of forming the quotation sheet are the business of the seller.
Read also: Types of transactions on the stock exchange: a guide for investors
How to read and understand a quote
Quotation sheets can sometimes be found on the merchant’s website, but often they must be requested directly, for example, for specific assets, or subscribe to an email newsletter (in the Ukrainian market this approach is practiced by large banks).
The quotation must indicate:
- Bid — the price at which the asset will be purchased from you;
- Ask is the price at which you can buy an asset.
The quotation may also include:
- bond maturity date;
- denomination currency;
- dividend yield;
- average daily price per share;
- closing price.
It is important to understand that relevant information for each asset may be different — traders may emphasize different nuances. For example, only in the quotation sheet of FC Daliz-Finance LLC is there a parameter “Cumulative income at maturity”, which shows the sum of all cash flows when purchasing and holding a bond until maturity.
FC Daliz-Finance LLC has the ability to both purchase military bonds on the secondary market and has experience in purchasing military bonds through primary dealers. In the first months of the war, our clients bought war bonds worth more than 500 million hryvnia. Join their number by leaving a request on our website
If you want to understand what are stock exchange quotes, pay attention to the methods of pricing. Bond quotation sheets usually indicate the yield to maturity for securities that have more than 1 coupon period and the simple yield for those securities that have only maturity remaining (legal requirement).
It is also important to consider what formulas are used to set % prices. Basically, when trading bonds in Ukraine they use:
- yield to maturity formula;
- simple yield formula (if there is 1 coupon period left before the security is redeemed; this is a legal requirement).
Foreign exchanges also use the method of expressing the value of a bond as a percentage of the face value. That is, a bond with a par value of 1000 and a net price of 900 would be expressed as 90.00. It is important in this case to take into account that there will be a “clean” and “dirty” price. In this case, the “dirty” price will include the accumulated coupon income.
Frequently asked questions: what are stock exchange quotes
Who issues quotes
Quotes are set by someone who is ready to sell/buy a security at the stated prices.
What is an exchange quotation list
The quotation list of an exchange is a list of securities/assets admitted to trading on a specific exchange.
