Guide to the stock exchange
This guide has been created in order to respond to general questions about the stock market and its function. You will find information and definitions which will help to understand the different markets and their products. Important terms and notions are described in a clear and precise manner. As this in an universe which is constantly subject to change, we suggest to attend our seminars in order to be always up to date and to gain a deeper understanding.
Chapter 1 : The Swiss Exchange
1.1 Exchanges
Exchanges are markets for securities or currencies, where trade prices and transaction volumes are operated according to strict regulations. The concept of market trading dates back to antiquity and increasingly gained in importance from the Middle Ages with the increasing foundation of new exchanges, particularly in Western and Central Europe. The economic significance of an exchange lies in the balance between offer and demand, as well as in increased capital mobility: every individual has, at all times, the opportunity to buy or sell securities.
Various products are traded on an exchange, among which the most important are equities, bonds and options. According to their investor profile and market expectation, investors may combine different security types. Trading begins as soon as sellers and buyers have agreed on a trade price. The particularity of exchange trading lies in the concentration of trading activities in a specific location and time frame, as well as the standardisation of transactions. Today, this process is electronically managed, and proofed as well as supervised according to strict regulatory guidelines.
Until recently, only selected institutions (mainly banks) had access to exchange trading. Investors were therefore required to buy and sell their securities through the costly and cumbersome intermediaries that were their banks. In this respect, Swissquote Bank offers an appealing alternative: through the combination of a powerful online trading system and a user-friendly information platform, the client is availed a simple and direct access to online trading. As orders are placed directly by clients and thus routed to the exchange within seconds, heavy administrative procedures are bypassed and costs lowered.
The exchange is defined by the following characteristics:
Exchanges are markets for securities or currencies, where trade prices and transaction volumes are operated according to strict regulations. The concept of market trading dates back to antiquity and increasingly gained in importance from the Middle Ages with the increasing foundation of new exchanges, particularly in Western and Central Europe. The economic significance of an exchange lies in the balance between offer and demand, as well as in increased capital mobility: every individual has, at all times, the opportunity to buy or sell securities.
Various products are traded on an exchange, among which the most important are equities, bonds and options. According to their investor profile and market expectation, investors may combine different security types. Trading begins as soon as sellers and buyers have agreed on a trade price. The particularity of exchange trading lies in the concentration of trading activities in a specific location and time frame, as well as the standardisation of transactions. Today, this process is electronically managed, and proofed as well as supervised according to strict regulatory guidelines.
Until recently, only selected institutions (mainly banks) had access to exchange trading. Investors were therefore required to buy and sell their securities through the costly and cumbersome intermediaries that were their banks. In this respect, Swissquote Bank offers an appealing alternative: through the combination of a powerful online trading system and a user-friendly information platform, the client is availed a simple and direct access to online trading. As orders are placed directly by clients and thus routed to the exchange within seconds, heavy administrative procedures are bypassed and costs lowered.
The exchange is defined by the following characteristics:
- It is based on the rules of bid and offer quotes - Access is restricted to a limited number of direct participants (member banks)
- Securities are not traded physically, as book entries are merely modified in the SIC/SEGA clearing system
- Trading takes place within a precisely defined time frame
- Der Handel findet innerhalb eines genau definierten Zeitrahmens statt
1.2 Why do companies go public ?
- Lower financing costs
- The creation of shareholder's equity serves as base for onward growth
- Access to international investors, corporate visibility - Increased corporate flexibility
- Transformation of a family enterprise into a publicly listed company (settlement of succession issues)
- Privatisation of state-owned companies
1.3 The Swiss Exchange (SIX Swiss Exchange)
In terms of total market capitalisation, the Swiss Exchange ranks among the seven leading exchanges worldwide. This fact is explained by several factors, among which the high capitalisation of listed Swiss companies, the large number of multinationals on the Swiss market and the fact that, contrary to many other countries, capital gains are not taxable in Switzerland.
Since electronic trading was implemented in 1997, traders are no longer physically located at the exchange's ring and work with a highly developed computer system instead. This system, called EBS (Electronic Bourse Switzerland), was the world's first totally integrated exchange system.
Since the 25th of june 2001 the SMI stocks are listed at the SIX Europe. This pan-european stock exchange is the result of a corporation between the SIX Swiss Exchange and Tradepoint (London) and includes more than 600 european blue chips. All these Blue-Chips are included in the STOXX Indices.
(See also Chapter The EBS System)
In terms of total market capitalisation, the Swiss Exchange ranks among the seven leading exchanges worldwide. This fact is explained by several factors, among which the high capitalisation of listed Swiss companies, the large number of multinationals on the Swiss market and the fact that, contrary to many other countries, capital gains are not taxable in Switzerland.
Since electronic trading was implemented in 1997, traders are no longer physically located at the exchange's ring and work with a highly developed computer system instead. This system, called EBS (Electronic Bourse Switzerland), was the world's first totally integrated exchange system.
Since the 25th of june 2001 the SMI stocks are listed at the SIX Europe. This pan-european stock exchange is the result of a corporation between the SIX Swiss Exchange and Tradepoint (London) and includes more than 600 european blue chips. All these Blue-Chips are included in the STOXX Indices.
(See also Chapter The EBS System)
Information:
Please notify that if no other information given, the rules concerning the SIX Swiss Exchange are also applicable for the SIX Europe.
Please notify that if no other information given, the rules concerning the SIX Swiss Exchange are also applicable for the SIX Europe.
1.4 European Exchanges
Europe's most prominent exchanges are the London Stock Exchange (LSE) and Frankfurt's Deutsche Börse.
Europe's most prominent exchanges are the London Stock Exchange (LSE) and Frankfurt's Deutsche Börse.
Information:
Please notify that if no other information given, the rules concerning the SIX Swiss Exchange are also applicable for the SIX Europe.
Please notify that if no other information given, the rules concerning the SIX Swiss Exchange are also applicable for the SIX Europe.
1.5 American Exchanges
The two leading exchanges in the US are the New York Stock Exchange (NYSE) and the NASDAQ.
For more information on international stock exchanges see also our overview on The Worlds Stock Exchanges
The two leading exchanges in the US are the New York Stock Exchange (NYSE) and the NASDAQ.
For more information on international stock exchanges see also our overview on The Worlds Stock Exchanges
1.6 SIX Swiss Exchange Opening Hours
Trading on SIX Swiss Exchange takes place in three distinct phases: Pre-Opening, Opening and Continuous Trading define, in combination, trading times on the Swiss Exchange. Each of these phases has its particularities and determines SIX Swiss Exchange opening times (06:00 to 22:00):
Pre-Opening: 06:00 to 09:00* and 17:30 to 22:00
Opening: at 09:00*
Continuous Trading: 09:00* to 17:30
Traders may place their orders on the exchange anytime between 06:00 and 22:00, yet orders will only be matched and transactions performed during the Continuous Trading phase.
Händler können ihre Börsenaufträge durchgehend von 06:00 bis 22:00 einreichen, jedoch werden sie nur während des laufenden Handels gematched und ihre Preise definiert.
The various security types represented on SIX Swiss Exchange are subject to different opening times:
Trading on SIX Swiss Exchange takes place in three distinct phases: Pre-Opening, Opening and Continuous Trading define, in combination, trading times on the Swiss Exchange. Each of these phases has its particularities and determines SIX Swiss Exchange opening times (06:00 to 22:00):
Pre-Opening: 06:00 to 09:00* and 17:30 to 22:00
Opening: at 09:00*
Continuous Trading: 09:00* to 17:30
Traders may place their orders on the exchange anytime between 06:00 and 22:00, yet orders will only be matched and transactions performed during the Continuous Trading phase.
Händler können ihre Börsenaufträge durchgehend von 06:00 bis 22:00 einreichen, jedoch werden sie nur während des laufenden Handels gematched und ihre Preise definiert.
The various security types represented on SIX Swiss Exchange are subject to different opening times:
- Swiss Confederation bonds: 08:30-17:00
- Stocks: 09:00-17:30
- Options: 09:15-17:30
- Other bonds: 09:30-17:00
Chapter 2: The EBS System
2.1 Definitions
The acronym EBS stands for "Electronic Bourse Switzerland" (Elektronische Börse Schweiz). The system is fully based on a computer network connected to the exchange's server. This chapter details all EBS functionalities. It is our aim to familiarise you with the technical jargon used in connection with this system, as well as with the latter's main functionalities.
Bid price = Buyer's quote
The price a buyer is ready to pay for the acquisition of a security.
> Demand
Ask price ou prix "ask" = cours vendeur ou cours offert (= je possède le titre et j'aimerais le vendre) Il s'agit du prix que le vendeur entend obtenir pour la vente de son titre.
The price a seller wants for a given security.
> Offer
Orderbook = There is one orderbook per listed security. All buy and sell orders in a given security are compiled and listed here.
Matching = Matching of compatible buy and sell orders.
The Swiss Market Feed (SMF) currently only delivers the best bid and ask price in each listed security. However, before year-end, SQ plans to provide its subscribers with the best five bid and ask prices in every orderbook.
The acronym EBS stands for "Electronic Bourse Switzerland" (Elektronische Börse Schweiz). The system is fully based on a computer network connected to the exchange's server. This chapter details all EBS functionalities. It is our aim to familiarise you with the technical jargon used in connection with this system, as well as with the latter's main functionalities.
Bid price = Buyer's quote
The price a buyer is ready to pay for the acquisition of a security.
> Demand
Ask price ou prix "ask" = cours vendeur ou cours offert (= je possède le titre et j'aimerais le vendre) Il s'agit du prix que le vendeur entend obtenir pour la vente de son titre.
The price a seller wants for a given security.
> Offer
Orderbook = There is one orderbook per listed security. All buy and sell orders in a given security are compiled and listed here.
Matching = Matching of compatible buy and sell orders.
The Swiss Market Feed (SMF) currently only delivers the best bid and ask price in each listed security. However, before year-end, SQ plans to provide its subscribers with the best five bid and ask prices in every orderbook.
2.2 Order Execution
On Swissquote Bank, these four points are normally executed in a few seconds. The order is placed with the exchange, in its original form. When it reaches the exchange, it is exactly identical with the client's initial input.
The Swiss Market Feed (SMF) currently only delivers the best bid and ask price in each listed security. However, before year-end, SQ plans to provide its subscribers with the best five bid and ask prices in every orderbook.
If a sell order arrives for a 100 shares at CHF 10, the match will take place and only 35 shares will remain on demand (BID) at CHF 10.
Order book during continuous trading
In our case, the client is actually his own trader. The Swissquote Bank user interface enables him to directly access the EBS system and thus circumvent the member banks' traders. Thereby, the client may enter his own orders in the orderbook directly and efficiently. In addition, our system is user-friendlier than the EBS interface, as it is designed to function as a platform for the general public.
- An investor places a buy or sell order with his trader.
- The trader routes the order onto the EBS system. The latter's IT system sorts all orders by security and assigns them to the corresponding orderbooks, where they are again sorted by time (time of order entry) and price (bid or ask).
- Buy and sell orders within a given orderbook are subjected to a constant comparison process. If two orders are compatible, their automatic matching generates a transaction (> Chapter 2.3).
- The trader is automatically and immediately notified of an order execution, the details of which he refers back to the client.
- SIX Swiss Exchange routes all transaction details to the relevant clearing houses.
- The clearing office is tasked with billing the transaction's consideration to the buyer and to credit the seller with the amount. This process takes place over three working days, called value days.
On Swissquote Bank, these four points are normally executed in a few seconds. The order is placed with the exchange, in its original form. When it reaches the exchange, it is exactly identical with the client's initial input.
The Swiss Market Feed (SMF) currently only delivers the best bid and ask price in each listed security. However, before year-end, SQ plans to provide its subscribers with the best five bid and ask prices in every orderbook.
| BID / BUY | ASK / SELL | |
|---|---|---|
| Volumes | Price | Volumes |
| 15 | 100 | |
| 14 | 120 | |
| 13 | 120 | |
| 12 | 150 | |
| 11 | 145 | |
| 135 | 10 | |
| 135 | 9 | |
| 120 | 8 | |
| 180 | 7 | |
| 189 | 6 |
Order book during trading hours.
A sample orderbook is represented above. The left column lists bid sizes, and ask sizes are listed on the right-hand column, corresponding to each bid or ask price quote in the centre column. A match takes place when an incoming order is accepted by the Matcher:If a sell order arrives for a 100 shares at CHF 10, the match will take place and only 35 shares will remain on demand (BID) at CHF 10.
Order book during continuous trading
In our case, the client is actually his own trader. The Swissquote Bank user interface enables him to directly access the EBS system and thus circumvent the member banks' traders. Thereby, the client may enter his own orders in the orderbook directly and efficiently. In addition, our system is user-friendlier than the EBS interface, as it is designed to function as a platform for the general public.
2.3. Matching
The term "matching" designates the pairing of compatible buy and sell orders. The aim is therefore to lead offer and demand on a security towards an agreed transaction price. This process takes place in the orderbook and is subject to various rules and regulations aimed at ensuring fair and orderly trading.
The are three different matching procedures at SIX Swiss Exchange: Pre-opening, Opening and Continuous Trading.
In all phases, an order's rank within the orderbook is defined by the principle of price-time priority:
The term "matching" designates the pairing of compatible buy and sell orders. The aim is therefore to lead offer and demand on a security towards an agreed transaction price. This process takes place in the orderbook and is subject to various rules and regulations aimed at ensuring fair and orderly trading.
The are three different matching procedures at SIX Swiss Exchange: Pre-opening, Opening and Continuous Trading.
In all phases, an order's rank within the orderbook is defined by the principle of price-time priority:
- At market: (> 7.3.1) such orders have priority over limited orders.
- Buy side: the highest price limit has priority (price priority)
- Sell side: the lowest price limit has priority (price priority)
- If the orderbook contains identically priced buy or sell orders, priority goes to that order which was accepted in the orderbook first (time priority).
2.3.1 Pre-Opening
The pre-opening phase is the time span between the end of a trading day (normally 17:30 hours) and the opening on the following trading day (09:00 hours for equities). However, the EBS system is not available betweeh 22:00 hours and 06:00 hours, on weekends and public holidays. In the pre-opening phase, the EBS system accepts incoming orders.
During that time, a theoretical matching takes place in the orderbook in order to define a theoretical opening price. The latter is available to licensed traders with member institutions and is continually recalculated and displayed.
The orderbook, however, is not updated and no transactions are generated in this phase. The last calculated theoretical opening price in the pre-opening phase corresponds to the day's actual opening price.
Below is a sample orderbook during pre-opening. Overlapping orders are counted in the grey fields on each side, from the least to the most advantageous, until that point is reached where the highest number of securities can be traded. In this case, the highest number of potential matches is for 2'600 shares. For that reason, the opening price will be 119.50.
This theoretical price is not available on the Swissquote service, where the previous trading day's closing price is always considered the current pre-opening price. This, however, is likely to change before year-end.
The pre-opening phase is the time span between the end of a trading day (normally 17:30 hours) and the opening on the following trading day (09:00 hours for equities). However, the EBS system is not available betweeh 22:00 hours and 06:00 hours, on weekends and public holidays. In the pre-opening phase, the EBS system accepts incoming orders.
During that time, a theoretical matching takes place in the orderbook in order to define a theoretical opening price. The latter is available to licensed traders with member institutions and is continually recalculated and displayed.
The orderbook, however, is not updated and no transactions are generated in this phase. The last calculated theoretical opening price in the pre-opening phase corresponds to the day's actual opening price.
Below is a sample orderbook during pre-opening. Overlapping orders are counted in the grey fields on each side, from the least to the most advantageous, until that point is reached where the highest number of securities can be traded. In this case, the highest number of potential matches is for 2'600 shares. For that reason, the opening price will be 119.50.
This theoretical price is not available on the Swissquote service, where the previous trading day's closing price is always considered the current pre-opening price. This, however, is likely to change before year-end.
| BID | ASK | |||
|---|---|---|---|---|
| Cumul | Bid Volume | Prices | Ask Volume | Cumul |
| 700 | 700 | Bestens | ||
| 125 | 850 | |||
| 124.5 | 650 | |||
| 124 | 850 | |||
| 123.5 | 550 | |||
| 123 | 500 | |||
| 122.5 | 200 | |||
| 800 | 100 | 122 | 200 | 5200 |
| 900 | 100 | 121.5 | 200 | 5000 |
| 1200 | 300 | 121 | 1200 | 4800 |
| 1500 | 300 | 120.5 | - | |
| 2200 | 700 | 120 | 1000 | 3600 |
| 2600 | 400 | 119.5 | 800 | 2600 |
| 3900 | 1300 | 119 | 500 | 1800 |
| 4900 | 1000 | 118.5 | 200 | 1300 |
| 6100 | 1200 | 118 | 200 | 1100 |
| 100 | 117.5 | |||
| 500 | 117 | |||
| 300 | 116.5 | |||
| 100 | 117 | |||
| Bestens | 900 | 900 |
2.3.2 Opening
The opening price calculated during the pre-opening phase is that which corresponds to the highest possible overall transaction volume. All transactions taking place at market open are executed at the opening price. An official opening price is only defined if and when a transaction is actually executed at market open. Should this not be the case, owing to the Bid Price being lower than the Ask Price, the field representing the official opening price remains blank. A so-called non-opening occurs when, at market open, all market orders ("at best" orders) cannot be executed.
In the present example, the Best Volume cannot be executed in totality
The opening price calculated during the pre-opening phase is that which corresponds to the highest possible overall transaction volume. All transactions taking place at market open are executed at the opening price. An official opening price is only defined if and when a transaction is actually executed at market open. Should this not be the case, owing to the Bid Price being lower than the Ask Price, the field representing the official opening price remains blank. A so-called non-opening occurs when, at market open, all market orders ("at best" orders) cannot be executed.
In the present example, the Best Volume cannot be executed in totality
| Date | Time | National # | Change |
| 03-05-2000 | - | 852'259 | - |
| Volume | Prev. close | Today's open | Last Non-opening |
| - | .01 | - | .01 |
| Bid Size | Ask Size | Bid - | Ask - |
| 100'000 | 4'011'200 | .01 | Best |
| 52 Weeks high | 52 Weeks low | Today's high | Today's low |
| .66 | .01 | - | - |
| Security Type | Strike Price | Ratio | Expiration |
| Warrant | 875 | 200 | 19-05-2000 |
| Premium | Premium/Year | Underlying | Udl Price 11:48:48 |
| 13.31 % | 693.89 % | ZURICH ALLIED N | 774 CHF (+6) |
2.3.3 Continuous Trading
Continuous trading is subject to other matching rules than apply to the pre-opening phase. As each new order comes in, the system tries to execute it immediately. In this process, the system tries to locate an equivalent order on the opposite side in the orderbook. For example an order to buy 100 UBSN at CHF 80 and an order to sell 100 UBSN at CHF 80 constitute a perfect match. Each new match establishes a new Reference Price, which corresponds to the last paid price (Last) in a given security. Each time two orders are matched, the system controls whether the transaction is admissible or whether the proposed trade corresponds to a Stop Trading situation(> Chapter 2.4).
Continuous trading is subjected to the following market rules:
Rule 1:
In our example, the security's opening is followed by the arrival of a buy order on 200 shares at market. According to rule 1, this order will be matched with the best quote (for the buyer) on the sell side, in this case at CHF 120. The transaction is awarded to the seller whose order has been entered in the orderbook first.
Rule 2:
Rule 3:
Although the reference price (CHF 121) is more advantageous for the seller, the transaction is executed at CHF 120 (Rule 3).
Continuous trading is subject to other matching rules than apply to the pre-opening phase. As each new order comes in, the system tries to execute it immediately. In this process, the system tries to locate an equivalent order on the opposite side in the orderbook. For example an order to buy 100 UBSN at CHF 80 and an order to sell 100 UBSN at CHF 80 constitute a perfect match. Each new match establishes a new Reference Price, which corresponds to the last paid price (Last) in a given security. Each time two orders are matched, the system controls whether the transaction is admissible or whether the proposed trade corresponds to a Stop Trading situation(> Chapter 2.4).
Continuous trading is subjected to the following market rules:
Rule 1:
If a newly introduced at-market order meets a limited order on the opposite side, the limited order's price becomes the new reference price. If the orderbook contains several counter-orders with different price limits, the combination of matches chosen will be the one which is most advantageous for the at-market order's execution.
| BID | ASK | |||
|---|---|---|---|---|
| Bid Volumes | Ask Volumes | |||
| 200 | Market | |||
| 122 | 200 | |||
| 121.5 | 200 | |||
| 121 | 1200 | |||
| 120 | 1000 | |||
| 119 | ||||
| 118.5 | ||||
| 118 | ||||
| Market | ||||
In our example, the security's opening is followed by the arrival of a buy order on 200 shares at market. According to rule 1, this order will be matched with the best quote (for the buyer) on the sell side, in this case at CHF 120. The transaction is awarded to the seller whose order has been entered in the orderbook first.
Rule 2:
If a newly introduced limited order meets an at-market order on the opposite side, this new limit becomes the trade price at which the transaction is executed. Priority is always awarded to the at-market order, even if a limited was introduced into the orderbook at an earlier point in time.
Rule 3:
If two at-market order oppose each other, both orders are matched at the current reference price. If another limited order is in the system with a more advantageous price limit - for the buyer/seller - the latter price will be used.
| BID | ASK | |||
|---|---|---|---|---|
| Bid Volumes | Ask Volumes | |||
| 500 | Market | |||
| 122 | 100 | |||
| 121 | 200 | |||
| 120 | 500 | |||
| Market | 500 | |||
Although the reference price (CHF 121) is more advantageous for the seller, the transaction is executed at CHF 120 (Rule 3).
2.3.4 Closing Auction and Closing Price
The daily closing price for equities and investment funds is calculated on the basis of a closing auction process. As in the pre-opening phase, the orderbook is not updated during the closing auction. All incoming orders are collected and form the basis for the constant calculation of a theoretical closing price, which is only visible for SIX Swiss Exchange traders.
The official closing price is again the price enabling the highest execution volume and serves as the first price of the pre-opening session on the following trading day. All transactions at the end of the closing auction are executed at the closing price.
This is how a stock is displayed on Swissquote during the closing auction phase.
LOGITECH N (LOGN)
The daily closing price for equities and investment funds is calculated on the basis of a closing auction process. As in the pre-opening phase, the orderbook is not updated during the closing auction. All incoming orders are collected and form the basis for the constant calculation of a theoretical closing price, which is only visible for SIX Swiss Exchange traders.
The official closing price is again the price enabling the highest execution volume and serves as the first price of the pre-opening session on the following trading day. All transactions at the end of the closing auction are executed at the closing price.
| Closing Auction Times | All stocks and investment funds: | 17h20-17h30 |
This is how a stock is displayed on Swissquote during the closing auction phase.
LOGITECH N (LOGN)
| Date | Time | National # | Change |
| 30-08-2001 |
17:19:07
10:08:24 |
1'260'719 | -.4 (-0.8 %) |
| Volume | Prev. close | Today's open | Last Between Auctions |
|
29'305
T: 1000 |
49.5 | 50 |
49.1
49.05 |
| Bid Size | Ask Size | Bid - | Ask 16:49:07 |
| 792 | 850 | 49.1 | 49.3 |
| 52 Weeks high | 52 Weeks low | Today's high | Today's low |
| 58.9 | 31.5 | 50 | 48.9 |
| Security Type | Dividend | Date | Ex-Date |
| Registered Share | - | - | - |
2.4 Stop Trading und Mistrades
2.4.1. "Stop trading"
To ensure maximum fairness and order during a trading session, SIX Swiss Exchange can take specific measures. Such is the case when a potential new reference price reveals an excessively large variation to the current reference price. SIX Swiss Exchange can intervene in such events during the opening or continuous trading phases. In these cases, trading can be suspended or the opening session itself can be delayed. These suspensions aim to avoid excessive price variations. After a Stop Trading or Delayed Opening, the first subsequent trade price is established on the basis of the highest execution principle.
If an information that is likely to cause a sharp price movement is generally known before market opening, SIX Swiss Exchange may temporarily disable the Stop Trading procedure. However, it must inform all market participants of that fact before market open.
This stock is in a stop trading situation
LOGITECH N (LOGN)
Stop Trading Regulations:
To ensure maximum fairness and order during a trading session, SIX Swiss Exchange can take specific measures. Such is the case when a potential new reference price reveals an excessively large variation to the current reference price. SIX Swiss Exchange can intervene in such events during the opening or continuous trading phases. In these cases, trading can be suspended or the opening session itself can be delayed. These suspensions aim to avoid excessive price variations. After a Stop Trading or Delayed Opening, the first subsequent trade price is established on the basis of the highest execution principle.
If an information that is likely to cause a sharp price movement is generally known before market opening, SIX Swiss Exchange may temporarily disable the Stop Trading procedure. However, it must inform all market participants of that fact before market open.
This stock is in a stop trading situation
LOGITECH N (LOGN)
| Date 4 | Time 5 | National # 6 | Change 7 |
| 30-08-2001 |
17:19:07
10:08:24 |
1'260'719 | -.4 (-0.8 %) |
| Volume | Prev. close | Today's open | Last Between Auctions |
|
29'305
T: 1000 |
49.5 | 50 |
49.1
49.05 |
| Bid Size | Ask Size | Bid - | Ask 16:49:07 |
| 792 | 850 | 49.1 | 49.3 |
| 52 Weeks high | 52 Weeks low | Today's high | Today's low |
| 58.9 | 31.5 | 50 | 48.9 |
| Security Type | Dividend | Date | Ex-Date |
| Registered Share | - | - | - |
Stop Trading Regulations:
| Wertschriften | Stop Trading während dem laufenden Handel | Stop Trading während der Eröffnung |
|---|---|---|
| SMI EquitiesABBN, ADEN, CSGN, GIVN, LONN, NESN, NOVN, ROG, RUKN, UBSN, ZURN | 5-min. interruption if the potential trade price differs from the current reference price by 0.75% or more | No Stop Trading |
| SMI Equities BAER, BALN, CFR, CIBN, CLN, EMS, HOL, KUD, RAN,SCMN, SEO, SGSI, SRN, SUN, SYNN, UHR, UHRN, UNAX | 5-min. interruption if the potential trade price differs from the current reference price by 1.5% or more | No Stop Trading |
| SIX Swiss Exchange Equities Switzerland | 15-min. interruption if the potential trade price differs from the current reference price by 2% or more. No Stop Trading if a stock's market price is inferior to CHF 10. | 15-min. interruption if the potential trade price differs from the current reference price 2% or more. No Stop Trading if a stock's market price is inferior to CHF 10. |
| Investment Funds and Exchange Traded Funds SIX Swiss Exchange | ||
| Foreign EquitiesSIX Swiss Exchange | 15-min. interruption if the potential trade price differs from the current reference price by 2% or more | No Stop Trading |
| Rights, Warrants and Options SIX Swiss Exchange | No Stop Trading | No Stop Trading |
| SIX Europe equities in EUR | 15-min. interruption if the potential trade price differs from the current reference price by 5% or more | No Stop Trading |
| Swiss federal bonds | 15-min. interruption if the potential trade price (quoted as percent)differs from the current reference price by 1% or more. | 15-min. interruption if the potential trade price (quoted as percent)differs from the current reference price by 1% or more. |
| Other bonds | 15-min. interruption if the potential trade price (quoted as percent)differs from the current reference price by 2% or more. Exception: interest mark-down on securities. No Stop Trading if a stock's market price is inferior to 10%. | 15-min. interruption if the potential trade price (quoted as percent) differs from the current reference price by 2% or more. Exception: interest mark-down on securities. No Stop Trading if a stock's market price is inferior to 10%. |
2.4.2. Mistrades
Such a transaction is called a Mistrade. The SIX Swiss Exchange has sole authority to assess market price. There are, in other words, no clear rules defining a mistrade. However, the SIX Swiss Exchange has to reach its decision within 30 minutes after market close and announce which trades it has deemed to be mistrades.
Die SIX Swiss Exchange kann dies tun, wenn der Preis des durch die Handelstransaktion zustandegekommenen Geschäftes erheblich vom Marktpreis abweicht oder-geordnete und faire Marktverhältnisse nicht gewährleistet sind.
Trades # 7 and 8 are mistrades, as paid prices diverge markedly from the market price (approximately CHF 0.45). If a Swissquote Bank subscriber has participated in a mistrade, we are advised of the fact by the SIX Swiss Exchange. Thereupon, we cancel the order in our system and make contact with our subscriber as quickly as possible regarding the issue. This is extremely important, as it may keep the client the client from reselling/buying back the position before we have cancelled the transaction.
At the SIX Europe, the handling of mistrades is defined in the directive #8 of the SIX Europe Directives.
Such a transaction is called a Mistrade. The SIX Swiss Exchange has sole authority to assess market price. There are, in other words, no clear rules defining a mistrade. However, the SIX Swiss Exchange has to reach its decision within 30 minutes after market close and announce which trades it has deemed to be mistrades.
Die SIX Swiss Exchange kann dies tun, wenn der Preis des durch die Handelstransaktion zustandegekommenen Geschäftes erheblich vom Marktpreis abweicht oder-geordnete und faire Marktverhältnisse nicht gewährleistet sind.
| Trade # | Time | Trade Prices | Trade Volumes | -Bid / +Ask |
|---|---|---|---|---|
| 14 | 09:35:56 | .44 | 100000 | + |
| 13 | 09:33:56 | .44 | 10000 | + |
| 12 | 09:31:36 | .44 | 10000 | + |
| 11 | 09:28:33 | .43 | 10000 | - |
| 10 | 09:28:08 | .43 | 53000 | - |
| 9 | 09:24:03 | .45 | 20000 | + |
| 8 | 09:21:43 | .80 | 20000 | + |
| 7 | 09:21:26 | .85 | 50000 | + |
| 6 | 09:20:40 | .44 | 50000 | + |
| 5 | 09:20:35 | .44 | 12000 | - |
| 4 | 09:18:48 | .45 | 100000 | + |
| 3 | 09:18:45 | .45 | 100000 | + |
| 2 | 09:17:59 | .45 | 10000 | + |
| 1 | 09:16:49 | .44 | 250000 | + |
Trades # 7 and 8 are mistrades, as paid prices diverge markedly from the market price (approximately CHF 0.45). If a Swissquote Bank subscriber has participated in a mistrade, we are advised of the fact by the SIX Swiss Exchange. Thereupon, we cancel the order in our system and make contact with our subscriber as quickly as possible regarding the issue. This is extremely important, as it may keep the client the client from reselling/buying back the position before we have cancelled the transaction.
At the SIX Europe, the handling of mistrades is defined in the directive #8 of the SIX Europe Directives.
2.5 Off-Exchange
Banks may conclude transactions between each other without dealing them on the SIX Swiss Exchange. Such trades are called off-exchange transactions. They are transactions that are not executed over the exchange's matching system.
Banks may conclude transactions between each other without dealing them on the SIX Swiss Exchange. Such trades are called off-exchange transactions. They are transactions that are not executed over the exchange's matching system.
2.5.1 Off-Exchange Trading during the pre-opening phase
During the pre-opening phase, SIX Swiss Exchange participants (member institutions) may trade all listed securities among each other without using the EBS system. However, they must report all such transactions to the Exchange within 30 minutes, in order to ensure market transparency. At the SIX Europe trade reports must be submitted within 3 mins.
LOGITECH N (LOGN)
In the Swissquote interface, off-exchange trading is represented in italics in the security overview. In this case, the last Off-Exchange trade took place at 10:08:24 hours. Paid price was CHF 49.05 for a volume of 1000.
During the pre-opening phase, SIX Swiss Exchange participants (member institutions) may trade all listed securities among each other without using the EBS system. However, they must report all such transactions to the Exchange within 30 minutes, in order to ensure market transparency. At the SIX Europe trade reports must be submitted within 3 mins.
LOGITECH N (LOGN)
| Date 4 | Time 5 | National # 6 | Change 7 |
| 30-08-2001 |
17:19:07
10:08:24 |
1'260'719 | -.4 (-0.8 %) |
| Volume | Prev. close | Today's open | Last Between Auctions |
|
29'305
T: 1000 |
49.5 | 50 |
49.1
49.05 |
| Bid Size | Ask Size | Bid - | Ask 16:49:07 |
| 792 | 850 | 49.1 | 49.3 |
| 52 Weeks high | 52 Weeks low | Today's high | Today's low |
| 58.9 | 31.5 | 50 | 48.9 |
| Security Type | Dividend | Date | Ex-Date |
| Registered Share | - | - | - |
In the Swissquote interface, off-exchange trading is represented in italics in the security overview. In this case, the last Off-Exchange trade took place at 10:08:24 hours. Paid price was CHF 49.05 for a volume of 1000.
2.5.2 Off-Exchange trades during the continuous trading phase
During continuous trading, orders may only be executed off-exchange if they are above the limits of exchange trading duty.
All transactions in Rights may also be concluded off-exchange.
During continuous trading, orders may only be executed off-exchange if they are above the limits of exchange trading duty.
| Limits of Exchange Trading Duty (status 4.99) | |
|---|---|
| Single orders | Aggregated Orders |
| Bonds for a nominal amount of CHF 100'000 or more | All aggregated orders for a market value of CHF 1'000'000 or more. |
| Stocks for a market value of CHF 200'000 or more | |
| Options for a market value of CHF 100'000 or more |
All transactions in Rights may also be concluded off-exchange.
2.6 Lot Sizes (Round Lots and Odd Lots)
Securities are traded in so-called lots, which means that it is not always possible to freely buy or sell any number of securities. If the number of securities one wishes to trade corresponds to a lot or a multiple thereof, it represents a round lot. If the number is smaller than a lot, it is called an odd lot. It is not possible to buy a single odd lot, yet one may place so-called round lot plus orders, corresponding to a round lot with an odd lot attached. If one were to buy, for example, 12'050 warrants characterised by a lot size of 100, 50 warrants are booked in the client's securities account as an odd lot. This position of 50 warrants can only be sold in form of an at-market order and if the orderbook indicates a buy order for the same size.
Securities are traded in so-called lots, which means that it is not always possible to freely buy or sell any number of securities. If the number of securities one wishes to trade corresponds to a lot or a multiple thereof, it represents a round lot. If the number is smaller than a lot, it is called an odd lot. It is not possible to buy a single odd lot, yet one may place so-called round lot plus orders, corresponding to a round lot with an odd lot attached. If one were to buy, for example, 12'050 warrants characterised by a lot size of 100, 50 warrants are booked in the client's securities account as an odd lot. This position of 50 warrants can only be sold in form of an at-market order and if the orderbook indicates a buy order for the same size.
| Security Type | Lot Size |
|---|---|
| Equities | 1 share |
| Bonds | 1 bond (i.e. CHF 5'000, 10'000 or 100'000 nominal value) |
| Warrants | In general 100 |
2.7 Price Steps
Securities cannot be traded in any price format. A market price can only rise or fall in specific price increments. Such a minimum price increment is called a "price step". Its size depends on the traded security's market price, as well as on its type.
Price steps for equity products (stocks, funds, options and rights)
Price steps for interest products
An order that does not respect these price steps is rejected by the EBS system. Securities listed in EUR at the SIX Europe have an increment of 0.01 EUR for any price range.
Securities cannot be traded in any price format. A market price can only rise or fall in specific price increments. Such a minimum price increment is called a "price step". Its size depends on the traded security's market price, as well as on its type.
Price steps for equity products (stocks, funds, options and rights)
| Price | Price Step |
|---|---|
| De CHF 0.01 à CHF 9.99 | CHF 0.01 |
| De CHF 10.00 à CHF 99.95 | CHF 0.05 |
| De CHF 100.00 à CHF249.75 | CHF 0.25 |
| De CHF 250.00 à CHF 499.50 | CHF 0.50 |
| De CHF 500.00 à CHF 4'999.00 | CHF 1.00 |
| De CHF 5'000.00 à ...... | CHF 5.00 |
Price steps for interest products
| Obligation | Kursabstufung |
|---|---|
| Obligation der Schweiz. Eidgenossenschaft | 0.01 % |
| Übrige Obligationen Schweiz | 0.05 % (<18 Monate: 0.01%) |
| Obligationen Ausland | 0.01 % |
| Wandel- & Optionsanleihen CH und Ausland | 0.05 % (<18 Monate: 0.01%) |
An order that does not respect these price steps is rejected by the EBS system. Securities listed in EUR at the SIX Europe have an increment of 0.01 EUR for any price range.
Chapter 3: Information Flow
This chapter provides a detailed description of an order's path from the Swissquote client's input to order execution by SIX Swiss Exchange.
3.1 Client places order (Step 1)
The client inputs his order on his computer, which is connected with SQB. In so doing, he enters the following information into the system:
Once the client has confirmed his order, the latter is immediately routed to the SQB platform, where it undergoes various screening procedures. During this transitional phase, the order is still deemed to be unreleased by the system, as can be visualised by the client on his account.
This step is described in full detail in Chapter 4.
The client inputs his order on his computer, which is connected with SQB. In so doing, he enters the following information into the system:
- Buy or Sell order
- Type of order
- Number of securities
- Symbol or Swiss security code
- Price
- Order validity
Once the client has confirmed his order, the latter is immediately routed to the SQB platform, where it undergoes various screening procedures. During this transitional phase, the order is still deemed to be unreleased by the system, as can be visualised by the client on his account.
This step is described in full detail in Chapter 4.
3.2 EBS (Step 2)
Once the order has reached the EBS system at the Swiss Exchange, it is attributed to the appropriate orderbook.
At this point, according to EBS matching rules (Chapter 2) and to the New Banking System's acceptance, four different scenarios are possible:
Once the order has reached the EBS system at the Swiss Exchange, it is attributed to the appropriate orderbook.
At this point, according to EBS matching rules (Chapter 2) and to the New Banking System's acceptance, four different scenarios are possible:
- The order is immediately executed.
- The order is only partially executed.
- The order awaits execution. This is the case if no order exists on the orderbook's opposite (sell or buy) side.
- The order is rejected.
- In all cases, the order's status is visible on the client's account statement:
- Executed: the matcher executed a perfect match.
- Partially executed: part of the order was executed.
- Unreleased: the order was held up somewhere in the system and will be entered into the EBS at a later point in time. Various technical reasons could explain such a situation (e.g. the order was entered outside trading hours or the pre-opening period).
- Open at SIX Swiss Exchange: The order is entered into the orderbook but still awaits execution.
- Rejected error message: Order details are erroneous or incomplete. This, however, should not be the case, as the order has been screened by ourselves before it was routed to the SIX Swiss Exchange.
3.3. Clearing (step 3)
Upon order execution, EBS sends the transaction details to SIS/SIC. ((> Chapter 4) )
SIS is tasked with securities clearing and SIC handles payments.
Once an order is executed, the transaction details are confirmed to the New Banking System via Gateway 2.
Clearing is handled by the New Banking System and the client is credited or debited according to his transaction.
The actual exchange of securities against the cash consideration only takes place 3 value days after the transaction.
Upon order execution, EBS sends the transaction details to SIS/SIC. ((> Chapter 4) )
SIS is tasked with securities clearing and SIC handles payments.
Once an order is executed, the transaction details are confirmed to the New Banking System via Gateway 2.
Clearing is handled by the New Banking System and the client is credited or debited according to his transaction.
The actual exchange of securities against the cash consideration only takes place 3 value days after the transaction.
3.4 Confirmation (Step 4)
Finally, the transaction is confirmed once again at all levels.
Right after the trade, the Swissquote client receives an his billing in PDF format including all executed transactions during the trading day. You will find all correspondance regarding your account/deposit in your personal mailbox in your account. This PDF documents replace the traditional transaction bill which is usually sent by banks to their clients.
Finally, the transaction is confirmed once again at all levels.
Right after the trade, the Swissquote client receives an his billing in PDF format including all executed transactions during the trading day. You will find all correspondance regarding your account/deposit in your personal mailbox in your account. This PDF documents replace the traditional transaction bill which is usually sent by banks to their clients.
3.5 Account Updating (Step 5)
As the transaction information transits through the SQB platform, it is used to perform a real-time position update in the client portfolio.
If for example the client has bought a security, he will see the corresponding position change in his securities account.
The full process (steps 1 through 5) is normally completed in no more than 5 seconds.
As the transaction information transits through the SQB platform, it is used to perform a real-time position update in the client portfolio.
If for example the client has bought a security, he will see the corresponding position change in his securities account.
The full process (steps 1 through 5) is normally completed in no more than 5 seconds.
Chapter 4: Securities Administration
4.1. The organisations: Swiss Interbank Clearing (SIC) and SEGAINTERSETTLE AG (SIS)
As soon as an exchange transaction has taken place, the relevant trade information is routed to the SIC and SIS. As already mentioned earlier, the Swiss Interbank Clearing (SIC) is responsible for financial settlements. It is an online money-transfer system guaranteeing a constant exchange of information among banks and with the Swiss National Bank.
SEGAINTERSETTLE AG (SIS) is the central clearing organisation for the settlement of Swiss and cross-border securities transactions.
SIS warehouses the securities of its clients (banks), whose positions are managed by means of securities accounts. Cumbersome physical deliveries are replaced with book entries in these accounts, which enables an automated settlement process. The option of physical delivery, however, remains available.
As soon as an exchange transaction has taken place, the relevant trade information is routed to the SIC and SIS. As already mentioned earlier, the Swiss Interbank Clearing (SIC) is responsible for financial settlements. It is an online money-transfer system guaranteeing a constant exchange of information among banks and with the Swiss National Bank.
SEGAINTERSETTLE AG (SIS) is the central clearing organisation for the settlement of Swiss and cross-border securities transactions.
SIS warehouses the securities of its clients (banks), whose positions are managed by means of securities accounts. Cumbersome physical deliveries are replaced with book entries in these accounts, which enables an automated settlement process. The option of physical delivery, however, remains available.
4.2 Securities administration: An example
The management of securities positions includes the following tasks:
The banks inform their clients of these corporate events and update the securities accounts accordingly. According to client request, rights can also be bought or sold. In addition, clients regularly receive account statements.
Our clients therefore have a securities account with the bank. The clients' securities, however, are not physically warehoused at Swissquote Bank, but in SQB's securities account with SIS. Nevertheless, e.g. in the case of registered shares, the securities in SQB's account with SIS are warehoused under the Swissquote client's name.
SECOM is an electronic and automated system that was developed to handle the processing of national and international securities transactions.
SECOM thus represents the interface between SIS and SIC, i.e. between the processes of securities delivery and transaction payment. Three value days after the transaction date, SECOM sends the payment order to SIC.
Such a transaction is cleared in three days, i.e. three value days, which means that the client is credited with the transaction amount at the value date only.
Note: No physical transaction takes place, securities and the corresponding cash amounts are only exchanged within SIS and SIC. An account is only credited with a balance amount if different amounts are being exchanged. This is an enormous advantage, as with more than 500'000 transfers per day, only the actual differences are transferred from one bank to another. This process is already very close to a full-fledged netting facility.
However, a Swissquote Bank customer can sell a security as soon as he has acquired it, without having to wait for the settlement date to do so. This is very important, as it enables the client to take advantage of daily price fluctuations on the exchange.
The management of securities positions includes the following tasks:
- Dividend and coupon collection
- New issues - Capital redemption
- Capital increases
- Splits
- Etc.
The banks inform their clients of these corporate events and update the securities accounts accordingly. According to client request, rights can also be bought or sold. In addition, clients regularly receive account statements.
Our clients therefore have a securities account with the bank. The clients' securities, however, are not physically warehoused at Swissquote Bank, but in SQB's securities account with SIS. Nevertheless, e.g. in the case of registered shares, the securities in SQB's account with SIS are warehoused under the Swissquote client's name.
SECOM is an electronic and automated system that was developed to handle the processing of national and international securities transactions.
SECOM thus represents the interface between SIS and SIC, i.e. between the processes of securities delivery and transaction payment. Three value days after the transaction date, SECOM sends the payment order to SIC.
Such a transaction is cleared in three days, i.e. three value days, which means that the client is credited with the transaction amount at the value date only.
Note: No physical transaction takes place, securities and the corresponding cash amounts are only exchanged within SIS and SIC. An account is only credited with a balance amount if different amounts are being exchanged. This is an enormous advantage, as with more than 500'000 transfers per day, only the actual differences are transferred from one bank to another. This process is already very close to a full-fledged netting facility.
However, a Swissquote Bank customer can sell a security as soon as he has acquired it, without having to wait for the settlement date to do so. This is very important, as it enables the client to take advantage of daily price fluctuations on the exchange.
Chapter 5: Indices
5.1 Generalities
Indices are meant to reflect and document developments and trends in specific economic areas over time. Indices that are relevant to exchange trading are generally composed of securities.
It is possible to include securities within an index according to various criteria:
Accordingly, at a given point in time, stocks are selected, e.g. among Swiss chemicals and pharmaceuticals, and weighted by market capitalisation. The company with the largest market capitalisation (market price x number of shares) is attributed the highest weighting, etc. The index can for example be constructed in such a way that at the time of inception its value is of 1'000 points. Thereupon, according to the components' market performance, the index will rise or fall.
Index trends are best reflected via graphical representations. Normally, the x axis represents time and the y axis reflects the index's point value.
The leading Swiss equity indices are the SMI, SPI and SNMI.
Indices are meant to reflect and document developments and trends in specific economic areas over time. Indices that are relevant to exchange trading are generally composed of securities.
It is possible to include securities within an index according to various criteria:
- Size of the listed companies
- Business type
- Corporation's origin
- Etc.
Accordingly, at a given point in time, stocks are selected, e.g. among Swiss chemicals and pharmaceuticals, and weighted by market capitalisation. The company with the largest market capitalisation (market price x number of shares) is attributed the highest weighting, etc. The index can for example be constructed in such a way that at the time of inception its value is of 1'000 points. Thereupon, according to the components' market performance, the index will rise or fall.
Index trends are best reflected via graphical representations. Normally, the x axis represents time and the y axis reflects the index's point value.
The leading Swiss equity indices are the SMI, SPI and SNMI.
5.2 Swiss Market Index (SMI)
The SMI is composed of Switzerland's so-called Blue Chips. These are currently the market's 29 highest capitalisations. The SMI can include up to 30 companies. However, only the SIX Swiss Exchange can decide whether a company is to be included in the SMI. A stock can only be included in the index if it has attained a certain level of market capitalisation and liquidity.
When a new company is included or a stock withdrawn from the SMI, individual index components have to be re-weighted. Current SMI heavyweights are Novartis Registered and Nestlé Registered, which, in combination, account for approximately 35% of the index. Of course, individual component weightings also vary as their market price fluctuates.
The SMI was first calculated on 30 June 1998 at an initial index value of 1'500 points.
On 30 August 2001, the SMI closed at 6'522.1.
SMI evolution from 1 January 1998 to 26 May 2000
The SMI is composed of Switzerland's so-called Blue Chips. These are currently the market's 29 highest capitalisations. The SMI can include up to 30 companies. However, only the SIX Swiss Exchange can decide whether a company is to be included in the SMI. A stock can only be included in the index if it has attained a certain level of market capitalisation and liquidity.
When a new company is included or a stock withdrawn from the SMI, individual index components have to be re-weighted. Current SMI heavyweights are Novartis Registered and Nestlé Registered, which, in combination, account for approximately 35% of the index. Of course, individual component weightings also vary as their market price fluctuates.
The SMI was first calculated on 30 June 1998 at an initial index value of 1'500 points.
On 30 August 2001, the SMI closed at 6'522.1.
SMI evolution from 1 January 1998 to 26 May 2000
5.3 Swiss Performance Index (SPI)
The SPI includes all Swiss (and Liechtenstein) stocks listed on the SIX Swiss Exchange, i.e. also those making up the SMI and SNMI (only Swiss companies). Lately, in exceptional cases, foreign companies have also been included.
At inception on 1 June 1987, the SPI's initial value was 1'000 points. It closed at 4'511.31 on 26 May 2000.
SPI evolution from 1 January 1998 to 26 May 2000
The SPI includes all Swiss (and Liechtenstein) stocks listed on the SIX Swiss Exchange, i.e. also those making up the SMI and SNMI (only Swiss companies). Lately, in exceptional cases, foreign companies have also been included.
At inception on 1 June 1987, the SPI's initial value was 1'000 points. It closed at 4'511.31 on 26 May 2000.
SPI evolution from 1 January 1998 to 26 May 2000
5.4. Swiss New Market Index (SNMI)
Since 1 March 2000, the SIX Swiss Exchange New Market has its own index. The New Market is the SIX Swiss Exchange Swiss Exchange's segment for high-growth Swiss and foreign companies. It includes dynamic companies characterised by high growth potential in innovative business areas (e.g. technology or Internet companies). The SNMI was first calculated on 1 January 2000 at 1'000 points. On 26 May 2000, it closed at 588.14.
SNMI evolution from 1 January 1998 to 26 May 2000
Since 1 March 2000, the SIX Swiss Exchange New Market has its own index. The New Market is the SIX Swiss Exchange Swiss Exchange's segment for high-growth Swiss and foreign companies. It includes dynamic companies characterised by high growth potential in innovative business areas (e.g. technology or Internet companies). The SNMI was first calculated on 1 January 2000 at 1'000 points. On 26 May 2000, it closed at 588.14.
SNMI evolution from 1 January 1998 to 26 May 2000
5.5 Leading Foreign Indices
For more information on international indices see: The World's Stock Exchanges
5.5.1 America
| America | |
|---|---|
| AMEX | Composite |
| AMEX | Internet |
| Nasdaq | Composite |
| Nasdaq | Nasdaq 100 |
| New York | DJ Industrial |
| New York | DJ Comp Internet |
| New York | DJ Transport |
| New York | DJ Utilities |
| New York | DJ Composite |
| New York | S&P 100 |
| New York | S&P 500 |
5.5.2 Europe
| Europe | |
|---|---|
| Amsterdam | AEX General |
| Brussels | BEL 20 |
| Deutsche Börse | Xetra Dax |
| Deutsche Börse | Xetra Dax 100 |
| Deutsche Börse | Nemax 50 |
| Europe | DJ Stoxx 50 |
| Europe | DJ Stoxx |
| Greece | General Share |
| Helsinki | Helsinki General |
| Istanbul | ISE 100 |
| Italian Exchange | MIBTel |
| Lisbon | BVL 30 |
| Oslo | Total Share |
| London | FTSE 30 |
| London | FTSE 100 |
| London | FTSE 250 |
| Madrid | General |
| Paris | CAC 40 |
| Russia | RTX |
| Stockholm | General |
| Swiss Exchange | SMI |
| Swiss Exchange | SPI |
| Swiss Exchange | SNMI |
| Vienna | ATX |
5.5.3 Asia & Pacific Markets
| Asia & Pacific Markets | |
|---|---|
| Australia | All Ordinaries |
| China | Shanghai Composite |
| Hong Kong | Hang Seng |
| India | BSE 30 |
| Jakarta | Composite |
| Korea | Seoul Composite |
| Malaysia | KLSE Composite |
| New Zealand | NZSE 40 |
| Singapore | Straits Times |
| Taiwan | Taiwan Weighted |
| Thailand | SET |
| Tokyo | Nikkei 225 |
For more information on international indices see: The World's Stock Exchanges
Chapter 6: Securities
6.1 Stocks
Today, the most current legal statute for corporation is that of a joint stock company (Aktiengesellschaft, AG). A main reason explaining this trend lies in the fact that the owners of a Swiss joint stock company are only liable for the capital they have personally invested in it.
On the foundation of an AG, the share capital (stock's par value x number of shares) corresponds to shareholders' equity.
A stock is therefore a security that corresponds to a fraction of an AG's value.
Today, the most current legal statute for corporation is that of a joint stock company (Aktiengesellschaft, AG). A main reason explaining this trend lies in the fact that the owners of a Swiss joint stock company are only liable for the capital they have personally invested in it.
On the foundation of an AG, the share capital (stock's par value x number of shares) corresponds to shareholders' equity.
A stock is therefore a security that corresponds to a fraction of an AG's value.
6.1.1 Stock Values
In considering the value of a share, it is important to distinguish between par value, intrinsic value and market value.
A stock's par value corresponds to a share's value on the company's foundation. It is the amount printed on the share certificate. Since 2001 the minimum for this amount for Swiss shares is CHF 0.01. Generally, a company's value grows over time as the business expands and generates profit.
The par value of a stock therefore only corresponds to a share's actual value in very rare cases.
A share's intrinsic value is calculated by dividing the book value of a corporation by the number of shares. Intrinsic value is difficult to calculate, as it can account for many factors that are not objectively quantifiable. The current trend is toward heavily weighting future developments as well as expected future profits and sales in the intrinsic value's calculation. Analysts are more interested in how much the company will be worth tomorrow than in what it is worth today.
A stock's market value should in principle roughly correspond to its intrinsic value. Yet market value is also tied to various factors and cannot always be explained rationally. In any case, market value is a key figure for investors, as it corresponds to the stock's market price. The latter depends on offer and demand. If one multiplies a stock's market price by the number of shares outstanding, one arrives at the company's market capitalisation.
In considering the value of a share, it is important to distinguish between par value, intrinsic value and market value.
A stock's par value corresponds to a share's value on the company's foundation. It is the amount printed on the share certificate. Since 2001 the minimum for this amount for Swiss shares is CHF 0.01. Generally, a company's value grows over time as the business expands and generates profit.
The par value of a stock therefore only corresponds to a share's actual value in very rare cases.
A share's intrinsic value is calculated by dividing the book value of a corporation by the number of shares. Intrinsic value is difficult to calculate, as it can account for many factors that are not objectively quantifiable. The current trend is toward heavily weighting future developments as well as expected future profits and sales in the intrinsic value's calculation. Analysts are more interested in how much the company will be worth tomorrow than in what it is worth today.
A stock's market value should in principle roughly correspond to its intrinsic value. Yet market value is also tied to various factors and cannot always be explained rationally. In any case, market value is a key figure for investors, as it corresponds to the stock's market price. The latter depends on offer and demand. If one multiplies a stock's market price by the number of shares outstanding, one arrives at the company's market capitalisation.
6.1.2 Shareholder Rights
Shares empower their holders with various rights, among which one distinguishes between company rights and patrimonial rights.
Company rights enable shareholders to take part and vote in general meetings. Generally, one share is equivalent to one vote. The company's duties also include periodically informing its shareholders of business development, financial situation, annual results, etc.
However, shareholders are normally more interested in patrimonial rights. These include, among others, the right to receive a dividend and the subscription right.
Dividends
Dividends are meant to compensate shareholders for the investment of their capital in a company. A corporation has the option to grant shareholders a stake in profits. Dividend payment must be approved at the company's annual general meeting and can be made in various forms. Most commonly, dividends are paid out in cash.
Dividends can also be paid in form of free shares or other advantages (e.g. free flights for SWISSAIR GROUP shareholders). This option has the advantage of preserving corporate liquidity. In certain cases, shareholders can also decide in which form they wish to receive their dividend, in which case it is called an optional dividend.
Subscription Rights
If a company wants to increase its capital, it may do so by means of a rights issue, whereby new shares are issued and sold. In the process, however, existing shareholders must be protected against the dilution of their holdings. They are thus granted the right to buy new shares in a specific proportion to their existing shareholding at a given price. This right has its own value and can therefore normally be separately traded on the exchange.
A client opening a cash and securities account through Swissquote is automatically credited with dividends and subscription rights in the relevant account. In addition, SQB informs clients in writing of any changes in capital structure, as well as of optional dividends.
Shares empower their holders with various rights, among which one distinguishes between company rights and patrimonial rights.
Company rights enable shareholders to take part and vote in general meetings. Generally, one share is equivalent to one vote. The company's duties also include periodically informing its shareholders of business development, financial situation, annual results, etc.
However, shareholders are normally more interested in patrimonial rights. These include, among others, the right to receive a dividend and the subscription right.
Dividends
Dividends are meant to compensate shareholders for the investment of their capital in a company. A corporation has the option to grant shareholders a stake in profits. Dividend payment must be approved at the company's annual general meeting and can be made in various forms. Most commonly, dividends are paid out in cash.
Dividends can also be paid in form of free shares or other advantages (e.g. free flights for SWISSAIR GROUP shareholders). This option has the advantage of preserving corporate liquidity. In certain cases, shareholders can also decide in which form they wish to receive their dividend, in which case it is called an optional dividend.
Subscription Rights
If a company wants to increase its capital, it may do so by means of a rights issue, whereby new shares are issued and sold. In the process, however, existing shareholders must be protected against the dilution of their holdings. They are thus granted the right to buy new shares in a specific proportion to their existing shareholding at a given price. This right has its own value and can therefore normally be separately traded on the exchange.
A client opening a cash and securities account through Swissquote is automatically credited with dividends and subscription rights in the relevant account. In addition, SQB informs clients in writing of any changes in capital structure, as well as of optional dividends.
6.1.3 Stock Types
The most common stock types in Switzerland are bearer shares, registered shares and participation certificates, whereby the latter cannot be duly considered shares, as they do not include company rights.
The name of a registered share's owner is entered in the company's registry, with the effect that the share becomes property of its registered owner. This enables the corporation to know precisely who its shareholders are.
By contrast, and as its name clearly indicates, a bearer share is owned by its bearer.
For small investors this distinction is only of limited importance.
The most common stock types in Switzerland are bearer shares, registered shares and participation certificates, whereby the latter cannot be duly considered shares, as they do not include company rights.
The name of a registered share's owner is entered in the company's registry, with the effect that the share becomes property of its registered owner. This enables the corporation to know precisely who its shareholders are.
By contrast, and as its name clearly indicates, a bearer share is owned by its bearer.
For small investors this distinction is only of limited importance.
6.1.4 Stock Splits
It can happen that, over time, a stock's market price rises so dramatically that it becomes difficult to trade. A stock with a par value of CHF 100 may for example have reached a market price of CHF 5'000. At such a price, however, a stock is less traded than a share worth CHF 500, as the high market price becomes prohibitive for small investors.
In such cases, a company can choose to split its shares. A 10:1 split means that one share with a par value of CHF 100 becomes ten shares with a par value of CHF 10. This operation does not affect a shareholder's total investment value, which has simply been spread over a tenfold number of shares. A stock split is often followed by a rise in market price, as the stock becomes more attractive for small investors.
It can happen that, over time, a stock's market price rises so dramatically that it becomes difficult to trade. A stock with a par value of CHF 100 may for example have reached a market price of CHF 5'000. At such a price, however, a stock is less traded than a share worth CHF 500, as the high market price becomes prohibitive for small investors.
In such cases, a company can choose to split its shares. A 10:1 split means that one share with a par value of CHF 100 becomes ten shares with a par value of CHF 10. This operation does not affect a shareholder's total investment value, which has simply been spread over a tenfold number of shares. A stock split is often followed by a rise in market price, as the stock becomes more attractive for small investors.
6.1.5 Exchange Listing of Stocks
Stocks are listed under their name, ISIN (International Security Identification Number), Valoren-number and a specific symbol or mnemonic.
Swissquote N
Stocks on Swissquote
LOGITECH 1 N 2 (LOGN) 3
Legend
Stocks are listed under their name, ISIN (International Security Identification Number), Valoren-number and a specific symbol or mnemonic.
| Valorennummer | 1'067'586 |
| Symbole: | SQN |
| ISIN: | CH00 1067586340 |
Stocks on Swissquote
LOGITECH 1 N 2 (LOGN) 3
| Date 4 | Time 5 | National # 6 | Change 7 |
| 29-08-2001 |
17:31:45
14:49:01 |
1'260'719 | -.8 (-1.6 %) |
| Volume 8 | Prev. close 9 | Today's open 10 | Last 11 |
|
97'392
T: 50000 |
49.5 | 50 |
48.7
48.4 |
| Bid Size 12 | Ask Size 13 | Bid 17:18:26 14 | Ask 17:18:26 15 |
| 2'159 | 500 | 49 | 49.1 |
| 52 Weeks high 16 | 52 Weeks low 17 | Today's high 18 | Today's low 19 |
| 58.9 | 31.5 | 50 | 48.7 |
| Security Type 20 | Dividend 21 | Date 22 | Ex-Date 23 |
| Registered Share | - | - | - |
Legend
| 1 | Security Name | 13 | Ask Size(ASK) |
| 2 | Security Type (N: Nominal) | 14 | Latest Bid Price |
| 3 | Symbol | 15 | Latest Ask Price |
| 4 | Date of Last Paid Price | 16 | Year High |
| 5 | Time of Last Paid Price | 17 | Year Low |
| 6 | Valoren-number | 18 | Intraday High |
| 7 | Price Change since previous Close | 19 | Intraday Low |
| 8 | Traded Volume on Trade Date | 20 | Security Type |
| 9 | Close Price on last Trading Day | 21 | Dividend Amount |
| 10 | Opening Price on current Trading Day | 22 | Dividend Payment Date |
| 11 | Last Paid Price | 23 | Date until which the share was to be held in order to be eligible for dividend payment |
| 12 | Bid Size (BID) |
6.2 Derivatives
A derivative is a product derived from financial instruments such as stocks, bonds, currencies, etc. The underlying financial instrument is called the underlying. The most common derivatives are futures and options.
A derivative is a product derived from financial instruments such as stocks, bonds, currencies, etc. The underlying financial instrument is called the underlying. The most common derivatives are futures and options.
6.2.1 Futures
In a future transaction, a buyer and seller agree to trade an instrument at a given future point in time and at a given price. Yet the transaction is already concluded now, whereas delivery and payment will only take place in the future.
A future transaction does not need to be held until its expiry date. Against payment of the current contract price, a transacting party can be released from the contract's obligations before its expiration. A futures exchange (e.g. Eurex) regulates such transactions between both parties.
In a future transaction, a buyer and seller agree to trade an instrument at a given future point in time and at a given price. Yet the transaction is already concluded now, whereas delivery and payment will only take place in the future.
A future transaction does not need to be held until its expiry date. Against payment of the current contract price, a transacting party can be released from the contract's obligations before its expiration. A futures exchange (e.g. Eurex) regulates such transactions between both parties.
6.2.2 Options
The buyer of an option acquires the right – but not the duty – to buy or sell a fixed number of underlying financial instruments at a given price within a certain time span or at a fixed future date.
Options can be traded on futures and options exchanges or issued as warrants.
As a trading facility in futures and options is currently not (yet) available on Swissquote Bank, this paper wil focus on the description of warrants.
Warrants
Warrants play an important role with small investors and represent a large proportion of total trading recorded on Swissquote Bank.
Understanding how warrants function is of capital importance as these instruments can generate high profits, but also steep losses.
As already mentioned, a warrant is a right – but not an obligation – to buy (call) or sell (put) an underlying instrument (stock, index, structured product) within a given time span and at a fixed price.
If an investor believes that the underlying instrument's price will rise in future, he could actually consider buying the underlying directly. Still, small investors often decide to rather buy a call warrant, as i relative terms, warrant prices generally rise more steeply that those of their underlying instruments.
The exercise price, or strike price, expiration date, exercise ratio as well as the underlying's market price constitute a warrant's key characteristics. To a large extent, these factors determine the warrant's value. Another factor is the market's expectation of the underlying instrument's future price development. This factor is reflected in the warrant's premium.
Please refer to the help of the Warrants Full Quote for more details. The Help Files for all topics are available in the Customer Care/Help Section.
Regarding the expiration date, one distinguishes between European-style and American-style warrants. European-style warrants can only be exercised on the expiration date, whereas American-style warrants can be exercised can be exercised anytime in between issue and expiry.
Warrants listed on SIX Swiss Exchange are predominantly European-style. Swissquote Bank clients very rarely decide to exercise a warrant position. A customer must call us if he wants to do so, as exercises cannot be performed directly over the Internet. If a client has a warrant position in his securities shortly before the expiration date, it is important that we inform him of the fact and ask him whether we should buy or exercise the position, or whether the client wishes to deal with the issue himself. If a warrant position remains in a client deposit beyond their expiration date, the bank will remove them from the books as worthless. In most cases, this is not in the client's interest (unless the warrant's market value has actually fallen to zero, which can also happen).
Warrants can only be exercised if they are in the money, i.e. if the underlying price is higher than a call warrant's strike price or lower than a put warrant's strike price.
Warrants are out of the money if the underlying price is lower than a call warrant's strike price or higher than a put warrant's strike price. It is pointless to exercise warrant positions that are out-of-the-money, as it is cheaper to buy/sell the underlying instrument directly in the market.
Warrants are out of the money if the underlying price is lower than a call warrant's strike price or higher than a put warrant's strike price. It is pointless to exercise warrant positions that are out-of-the-money, as it is cheaper to buy/sell the underlying instrument directly in the market.
When exercising in-the-money index warrants, the investor receives the price difference between the index's value on expiry and the strike price, in proportion of the exercise ratio.
A call warrant's price rises with the underlying price; a put warrant's price rises when the underlying price falls.
Konsultieren Sie bitte für genauere Details zur Optionspreisberechnung unsere Hilfefunktion bei Warrants Full Quote.
Warrants on Swissquote SCMOK 1 UBS 2 C 3 02/01 (SCMOK)
Legend
Examples:
SCMOK 1 UBS 2 C 3 02/01 (SCMOK)
One sees in this example that the strike price is much higher than the underlying, whereby the warrant is practically worthless. The warrant is out of the money. It might have been worth a little more had its time to expiry been longer, e.g. expiration date in 2001.
NESBU UBS C 01/02 (NESBU )
This warrant has a relatively high market value, as the strike is far lower than than the actual underlying.
The buyer of an option acquires the right – but not the duty – to buy or sell a fixed number of underlying financial instruments at a given price within a certain time span or at a fixed future date.
Options can be traded on futures and options exchanges or issued as warrants.
As a trading facility in futures and options is currently not (yet) available on Swissquote Bank, this paper wil focus on the description of warrants.
Warrants
Warrants play an important role with small investors and represent a large proportion of total trading recorded on Swissquote Bank.
Understanding how warrants function is of capital importance as these instruments can generate high profits, but also steep losses.
As already mentioned, a warrant is a right – but not an obligation – to buy (call) or sell (put) an underlying instrument (stock, index, structured product) within a given time span and at a fixed price.
If an investor believes that the underlying instrument's price will rise in future, he could actually consider buying the underlying directly. Still, small investors often decide to rather buy a call warrant, as i relative terms, warrant prices generally rise more steeply that those of their underlying instruments.
The exercise price, or strike price, expiration date, exercise ratio as well as the underlying's market price constitute a warrant's key characteristics. To a large extent, these factors determine the warrant's value. Another factor is the market's expectation of the underlying instrument's future price development. This factor is reflected in the warrant's premium.
Please refer to the help of the Warrants Full Quote for more details. The Help Files for all topics are available in the Customer Care/Help Section.
| Call Warrant | Put Warrant | |
|---|---|---|
| Strike Price et underlying | If the strike price is lower than the underlying price, the call warrant has positive value. | If the strike price is higher than the underlying price, the put warrant has positive value. |
| Expiration date | As a general rule, the further the expiration date, the higher the warrant's value. | |
| Ratio | The ratio indicates how many warrants are needed to exercise one unit of the underlying instrument, i.e. to acquire/sell 1 share. The lower the ratio, the higher the warrant price (in absolute terms). | |
| Premium | A high premium indicates that the market expects the underlying to rise strongly in future. | A high premium indicates that the market expects the underlying to fall steeply in future. |
| As a general rule, the further the expiration date, the higher the warrant's premium. | ||
Regarding the expiration date, one distinguishes between European-style and American-style warrants. European-style warrants can only be exercised on the expiration date, whereas American-style warrants can be exercised can be exercised anytime in between issue and expiry.
Warrants listed on SIX Swiss Exchange are predominantly European-style. Swissquote Bank clients very rarely decide to exercise a warrant position. A customer must call us if he wants to do so, as exercises cannot be performed directly over the Internet. If a client has a warrant position in his securities shortly before the expiration date, it is important that we inform him of the fact and ask him whether we should buy or exercise the position, or whether the client wishes to deal with the issue himself. If a warrant position remains in a client deposit beyond their expiration date, the bank will remove them from the books as worthless. In most cases, this is not in the client's interest (unless the warrant's market value has actually fallen to zero, which can also happen).
Warrants can only be exercised if they are in the money, i.e. if the underlying price is higher than a call warrant's strike price or lower than a put warrant's strike price.
Warrants are out of the money if the underlying price is lower than a call warrant's strike price or higher than a put warrant's strike price. It is pointless to exercise warrant positions that are out-of-the-money, as it is cheaper to buy/sell the underlying instrument directly in the market.
Warrants are out of the money if the underlying price is lower than a call warrant's strike price or higher than a put warrant's strike price. It is pointless to exercise warrant positions that are out-of-the-money, as it is cheaper to buy/sell the underlying instrument directly in the market.
When exercising in-the-money index warrants, the investor receives the price difference between the index's value on expiry and the strike price, in proportion of the exercise ratio.
A call warrant's price rises with the underlying price; a put warrant's price rises when the underlying price falls.
Konsultieren Sie bitte für genauere Details zur Optionspreisberechnung unsere Hilfefunktion bei Warrants Full Quote.
Warrants on Swissquote SCMOK 1 UBS 2 C 3 02/01 (SCMOK)
| Date | Time | National # | Change |
| 31-05-2000 |
13:55:48
09:18:28 |
1'056'491 | .02 (3.6 %) |
| Volume | Prev. close | Today's open | Last |
|
801'200
T: 300000 |
.56 | .59 |
.58
.57 |
| Bid Size | Ask Size | Bid - | Ask 14:01:34 |
| 495'000 | 1'007'300 | .58 | .6 |
| 52 Weeks high | 52 Weeks low | Today's high | Today's low |
| 1.72 | .39 | .59 | .56 |
| Security Type 4 | Dividend 21 5 | Date 22 6 | Ex-Date 23 7 |
| Warrant | 650 | 100 | 16-02-2001 |
| Premium 8 | Premium/Year 9 | Underlying 10 | Udl Price 14:00:28 11 |
| 19.39 % | 27.12 % | SWISSCOM N | 593 CHF (+8) |
Legend
| 1 | Warrant Name / Symbol |
| 2 | Issuer |
| 3 | Warrant Type (Call/ Put) |
| 4 | Security Type |
| 5 | Exercise Price |
| 6 | Exercise Ratio (number of warrants required to obtain 1 underlying unit) |
| 7 | Expiration Date |
| 8 | (Last x Ratio) + Strike / Underlying |
| 9 | Premium: Premium x 360 / Days to expiry |
| 10 | Underlying |
| 11 | Underlying Last Paid Price |
Examples:
SCMOK 1 UBS 2 C 3 02/01 (SCMOK)
| Date | Time | National # | Change |
| 31-05-2000 | 12:31:28 | 978'005 | -.01 (-50.0 %) |
| Volume | Prev. close | Today's open | Last |
| 175'000 | .02 | - | .01 |
| Bid Size | Ask Size | Bid - | Ask 14:01:34 |
| 1'050'000 | 403'100 | .01 | .02 |
| 52 Weeks high | 52 Weeks low | Today's high | Today's low |
| 1.19 | .01 | .01 | .01 |
| Security Type | Strike Price | Date 22 | Ex-Date 23 |
| Warrant | 700 | 100 | 16-06-2000 |
| Premium | Premium/Year | Underlying | Udl Price 14:00:28 |
| 12.16 % | 277.40 % | CLARIANT N | 625 CHF (-8) |
NESBU UBS C 01/02 (NESBU )
| Date | Time | National # | Change |
| 31-05-2000 | 10:35:56 | 576'794 | -.2 (-1.1 %) |
| Volume | Prev. close | Today's open | Last |
| 135'000 | 18 | - | 17.8 |
| Bid Size | Ask Size | Bid - | Ask 14:01:34 |
| 5'000 | 500 | 17.85 | 17.9 |
| 52 Weeks high | 52 Weeks low | Today's high | Today's low |
| 18.6 | 11.2 | 18.25 | 17.8 |
| Security Type | Strike Price | Date 22 | Ex-Date 23 |
| Warrant | 1500 | 100 | 15-01-2002 |
| Premium | Premium/Year | Underlying | Udl Price 13:05:02 |
| 2.15 % | 1.32 % | NESTLE N | 3211 CHF (-69) |
6.3 Bonds
Bonds are financing instruments for corporations, but also for sovereign states. They are debt obligations with a fixed time span and bearing a specific rate of interest (coupon) that can be fixed or variable. Bonds are normally denominated in nominal values of CHF 5'000, CHF 10'000 or CHF 100'000. An investor thus buys CHF 5'000 of a corporation's bonds, receives yearly interest payments and is repaid CHF 5'000 at the end of the bond's life. The rate of interest is determined by the issuing entity's creditworthiness. The lower the issuer's solvency, the higher the rate of interest, as the investor bears a higher risk that his bonds are not repaid at maturity.
Bonds can also be exchange-traded like any other security, with the difference that a bond price is not expressed in absolute terms but in percentage points.
This is a bond issued by the Canton of Zurich, bearing 5.375% interest. Interest is payable yearly on 9 December and the bond matures in December 2003. The bond price of 104.1 expresses that the bond is traded 4.1% above par value.
5.375 KT ZH 94-03 (ZH944 )
In fixed-income transactions, a bond's accrued interest must always be added to its market price.
Convertible Bonds (Convertibles)
Convertibles are corporate bonds that can be converted into the corporation's stock during the bond's life.
1.25 JEL CV 98-04 (JEL98)
Warrant Bonds
Warrant bonds are normal bonds with an attached warrant. The latter gives the bondholder the right to buy the underlying company's stock at a certain price within a given time span. This type of bond issue normally bears a lower rate of interest than standard bonds.
A warrant bond is traded cum warrants when the option is still attached to the bond. Once the option has been detached and exercised the bond trades ex warrant. The cum bond price is therefore higher than the ex price.
1 GENERA M 98/03 (GNE98M)
This is a sample cum warrant bond. Despite the low rate of interest (coupon), the bond trades at 112.95.
Bonds are financing instruments for corporations, but also for sovereign states. They are debt obligations with a fixed time span and bearing a specific rate of interest (coupon) that can be fixed or variable. Bonds are normally denominated in nominal values of CHF 5'000, CHF 10'000 or CHF 100'000. An investor thus buys CHF 5'000 of a corporation's bonds, receives yearly interest payments and is repaid CHF 5'000 at the end of the bond's life. The rate of interest is determined by the issuing entity's creditworthiness. The lower the issuer's solvency, the higher the rate of interest, as the investor bears a higher risk that his bonds are not repaid at maturity.
Bonds can also be exchange-traded like any other security, with the difference that a bond price is not expressed in absolute terms but in percentage points.
This is a bond issued by the Canton of Zurich, bearing 5.375% interest. Interest is payable yearly on 9 December and the bond matures in December 2003. The bond price of 104.1 expresses that the bond is traded 4.1% above par value.
5.375 KT ZH 94-03 (ZH944 )
| Date | Time | National # | Change |
| 02-06-2000 | 10:28:49 | 306'248 | .05 (0.0 %) |
| Volume | Prev. close | Today's open | Last |
| 600 | 104.05 | - | 104.1 PCT |
| Bid Size | Ask Size | Bid 17:00:00 | Ask 17:00:00 |
| 250 | 250 | 104 | 104.25 |
| 52 Weeks high | 52 Weeks low | Today's high | Today's low |
| 112.85 | 104.05 | 104.1 | 104.1 |
| Security Type | Interest | Redemption | Maturity |
| Bond | 5.375 | 09-12-2003 | 09-12-2003 |
In fixed-income transactions, a bond's accrued interest must always be added to its market price.
Convertible Bonds (Convertibles)
Convertibles are corporate bonds that can be converted into the corporation's stock during the bond's life.
1.25 JEL CV 98-04 (JEL98)
| Date | Time | National # | Change |
| 02-06-2000 |
16:10:30
17:13:08 |
925'835 | 3.2 (3.0 %) |
| Volume | Prev. close | Today's open | Last |
|
6400
T: 50 |
105.05 | 457.5 |
108.25 PC
T107.25 |
| Bid Size | Ask Size | Bid - | Ask 16:49:07 |
| 50 | 20 | 106 | 108.5 |
| 52 Weeks high | 52 Weeks low | Today's high | Today's low |
| 115 | 93 | 108.25 | 106.5 |
| Security Type | Interest | Redemption | Maturity |
| Convertible Bond | 1.25 | 17-08-2004 | 17-08-2004 |
Warrant Bonds
Warrant bonds are normal bonds with an attached warrant. The latter gives the bondholder the right to buy the underlying company's stock at a certain price within a given time span. This type of bond issue normally bears a lower rate of interest than standard bonds.
A warrant bond is traded cum warrants when the option is still attached to the bond. Once the option has been detached and exercised the bond trades ex warrant. The cum bond price is therefore higher than the ex price.
1 GENERA M 98/03 (GNE98M)
| Date | Time | National # | Change |
| 02-06-2000 |
16:10:30
17:13:08 |
925'835 | 3.2 (3.0 %) |
| Volume | Prev. close | Today's open | Last |
|
6400
T: 50 |
105.05 | 457.5 |
108.25 PC
T107.25 |
| Bid Size | Ask Size | Bid - | Ask 16:49:07 |
| 50 | 20 | 106 | 108.5 |
| 52 Weeks high | 52 Weeks low | Today's high | Today's low |
| 115 | 93 | 108.25 | 106.5 |
| Security Type | Interest | Redemption | Maturity |
| Convertible Bond | 1.25 | 17-08-2004 | 17-08-2004 |
6.4 Investment Funds
Funds are joint investments drawing capital by means of public advertisement and generally managed according to the principles of risk distribution for the account of client investors.
Certain funds are listed on SIX Swiss Exchange, but only a small minority. Funds are generally bought directly from the funds' managers. Through the Swissquote Bank you can buy funds of the following banks: Credit Suisse, Pictet, Vontobel,, Swissca and UBS, this englobes more than 450 Investments Funds. More Investment Funds will be offered until the end of the year. Swissquote Bank counts to offer more than 2000 Investment Funds on-line by the middle of 2002.
IMMOFONDS (IM )
This is a fund investing in real estate. A precise description of the fund's assets is however not available. If an investor believes that the real-estate market is about to boom, he might be interested in buying into this fund.
Funds are joint investments drawing capital by means of public advertisement and generally managed according to the principles of risk distribution for the account of client investors.
Certain funds are listed on SIX Swiss Exchange, but only a small minority. Funds are generally bought directly from the funds' managers. Through the Swissquote Bank you can buy funds of the following banks: Credit Suisse, Pictet, Vontobel,, Swissca and UBS, this englobes more than 450 Investments Funds. More Investment Funds will be offered until the end of the year. Swissquote Bank counts to offer more than 2000 Investment Funds on-line by the middle of 2002.
IMMOFONDS (IM )
| Date | Time | National # | Change |
| 02-06-2000 | 16:40:47 | 977'876 | -6 (-2.1 %) |
| Volume | Prev. close | Today's open | Last Between Auctions |
| 360 | 286 | - | 280 |
| Bid Size | Ask Size | Bid 17:00:55 | Ask 17:00:55 |
| 540 | 200 | 280 | 285 |
| 52 Weeks high | 52 Weeks low | Today's high | Today's low |
| 349 | 278 | 282 | 280 |
| Security Type | Dividend | Date | Ex-Date |
| Unit Trust (fund) | 13.4 | 15-09-1999 | 15-09-1999 |
This is a fund investing in real estate. A precise description of the fund's assets is however not available. If an investor believes that the real-estate market is about to boom, he might be interested in buying into this fund.
Chapter 7: Trading with Swissquote Bank SA
7.1. Swissquote Public and Swissquote Premium
The Swissquote Bank SA financial platform allows you access to various stock exchanges and products. You can deal directly on these markets from your trading account.
Type www.swissquote.ch into the browser of your choice to go to the Swissquote Public home page.
Swissquote Public gives access to a large number of functions based on delayed information. The service lets you call up the stock prices of listed companies on the various exchanges. Some indices are also available in real time.
Swissquote Premium gives you access to our range of analytical tools and lets you work in real time.
To enjoy Swissquote Premium, connect to your trading account and click on Bank Login. Swissquote Premium is activated automatically. You can then deal in all the financial products available on the various markets in real time.
Clicking on the Login Premium button will also give you real-time access, without having to log in to your account. This facility is very useful for following markets, using analytical tools and monitoring financial information.
Buying or selling stocks is very simple. Either use the Trade It button available in all the analytical tools, or the Trade button in your account.
If you are in Login Premium or Swissquote Public mode, click on the Trade It button. The system will then ask for your login and password to connect to your bank account. The browser will switch to encryption automatically.
The Swissquote Bank SA financial platform allows you access to various stock exchanges and products. You can deal directly on these markets from your trading account.
Type www.swissquote.ch into the browser of your choice to go to the Swissquote Public home page.
Swissquote Public gives access to a large number of functions based on delayed information. The service lets you call up the stock prices of listed companies on the various exchanges. Some indices are also available in real time.
Swissquote Premium gives you access to our range of analytical tools and lets you work in real time.
To enjoy Swissquote Premium, connect to your trading account and click on Bank Login. Swissquote Premium is activated automatically. You can then deal in all the financial products available on the various markets in real time.
Clicking on the Login Premium button will also give you real-time access, without having to log in to your account. This facility is very useful for following markets, using analytical tools and monitoring financial information.
Buying or selling stocks is very simple. Either use the Trade It button available in all the analytical tools, or the Trade button in your account.
If you are in Login Premium or Swissquote Public mode, click on the Trade It button. The system will then ask for your login and password to connect to your bank account. The browser will switch to encryption automatically.
7.2. Finding a stock
With Swissquote Bank SA you can deal in virtually any listed stock. Before buying or selling a particular stock it is advisable to check the price.
To do this, go to the Market and Quotes page. Enter the ticker, Swiss security number or ISIN in the top left-hand field then select the market and click on Quote.
You can also use the search function to carry out an advanced search. Follow the instructions shown, the guidance is very intuitive and easy to use.
Once you have found your stock the screen will show the full quote, with a great deal of information about it. You can check the charts and look at the traded prices throughout the day. If you decide to deal, just click on Trade It.
The system automatically records the stock details in your account. Then just indicate buy or sell, and specify the quantity, the type of order and how long it is valid for.
With Swissquote Bank SA you can deal in virtually any listed stock. Before buying or selling a particular stock it is advisable to check the price.
To do this, go to the Market and Quotes page. Enter the ticker, Swiss security number or ISIN in the top left-hand field then select the market and click on Quote.
You can also use the search function to carry out an advanced search. Follow the instructions shown, the guidance is very intuitive and easy to use.
Once you have found your stock the screen will show the full quote, with a great deal of information about it. You can check the charts and look at the traded prices throughout the day. If you decide to deal, just click on Trade It.
The system automatically records the stock details in your account. Then just indicate buy or sell, and specify the quantity, the type of order and how long it is valid for.
7.3. Different types of order
7.3.1 Simple orders
Order type: at market
Orders at market are executed at the best bid or offer price. The price is not fixed in advance, nor is it guaranteed. In general, market orders have the advantage that they are executed immediately. They take priority over all other types of orders and are used for very liquid securities.
If volume in a stock is low, market orders can be tricky. They may come up against a low volume of offers if the order book has a limit well above or below the price the stock normally trades at.
Order type: limit
This is the most frequently used type of order and offers a high degree of security. Buyers state the maximum price they wish to pay, sellers the minimum price they will accept for a stock. If no counterparty is willing to deal within the limit, no transaction takes place.
Offers then remain in the order book until they expire.
Sellers who wish to be sure their order will be executed should set the offer price as the maximum limit, if the volume is sufficient. Conversely, buyers should chose the bid price as the maximum limit, if the volume allows for it.
Order type: stop
A stop order is a conditional order that will only be placed when a trigger price is hit or passed. At that point it will be put into the order book as an order at market, i.e. with no price guarantee.
Stop-buy orders used to be called “on-stop” and stop-sell orders “stop-loss.”
Order type: stop-limit:
Stop-limit orders are placed in the same way as other stop orders, but will be converted into limit orders in the order book rather than market orders.
Stop-limit orders allow a greater control over the execution price than stop orders, because the stop level and the limit level set the range within which it will occur. On the other hand, there is no guarantee of execution if the price remains permanently outside this range.
Order type: at market
Orders at market are executed at the best bid or offer price. The price is not fixed in advance, nor is it guaranteed. In general, market orders have the advantage that they are executed immediately. They take priority over all other types of orders and are used for very liquid securities.
If volume in a stock is low, market orders can be tricky. They may come up against a low volume of offers if the order book has a limit well above or below the price the stock normally trades at.
Order type: limit
This is the most frequently used type of order and offers a high degree of security. Buyers state the maximum price they wish to pay, sellers the minimum price they will accept for a stock. If no counterparty is willing to deal within the limit, no transaction takes place.
Offers then remain in the order book until they expire.
Sellers who wish to be sure their order will be executed should set the offer price as the maximum limit, if the volume is sufficient. Conversely, buyers should chose the bid price as the maximum limit, if the volume allows for it.
Limit buy (Buy on dip) |
Limit sell (Profit taking) |
Order type: stop
A stop order is a conditional order that will only be placed when a trigger price is hit or passed. At that point it will be put into the order book as an order at market, i.e. with no price guarantee.
Stop-buy orders used to be called “on-stop” and stop-sell orders “stop-loss.”
Stop-buy |
Stop-sell |
Order type: stop-limit:
Stop-limit orders are placed in the same way as other stop orders, but will be converted into limit orders in the order book rather than market orders.
Stop-limit orders allow a greater control over the execution price than stop orders, because the stop level and the limit level set the range within which it will occur. On the other hand, there is no guarantee of execution if the price remains permanently outside this range.
Stop-limit buy |
Stop-limit sell |
7.3.2 Complex orders
Trailing stop
A trailing stop order is a stop order with a variable stop level.
When selling, this type of order lets you follow a stock up until the trend starts to change. The aim is to lock in gains by following the trend.
When buying, the aim is to optimize the entry price by following a stock downwards until the moment the trend starts to move up.
Trailing stop-limit
The difference between a trailing stop-limit and a trailing stop is the same as that between a stop-limit and a stop order; once the trigger level has been hit, a limit order is sent to the order book.
OCO
An OCO (one cancels the other) order has two ‘legs,’ a limit and a stop. When one is executed, this automatically cancels the other.
For sellers, this type of order lets them set a target profit (the limit order) while still protecting themselves from a possible setback (thanks to the stop order).
For buyers, this type of order lets them buy on a setback (the limit order) or when a level is crossed (thanks to the stop order).
Trailing stop
A trailing stop order is a stop order with a variable stop level.
When selling, this type of order lets you follow a stock up until the trend starts to change. The aim is to lock in gains by following the trend.
When buying, the aim is to optimize the entry price by following a stock downwards until the moment the trend starts to move up.
| Trailing stop-sell | Trailing stop-buy | |
|---|---|---|
| Purpose | Lock in gains by following the uptrend. | Optimize entry price by following the downtrend. |
| In bull market | Stop level follows the price up. | Stop level stabilizes until purchase. |
| In bear market | Stop level stabilizes until sale. | Stop level follows the price down. |
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Example |
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Trailing stop-limit
The difference between a trailing stop-limit and a trailing stop is the same as that between a stop-limit and a stop order; once the trigger level has been hit, a limit order is sent to the order book.
OCO
An OCO (one cancels the other) order has two ‘legs,’ a limit and a stop. When one is executed, this automatically cancels the other.
For sellers, this type of order lets them set a target profit (the limit order) while still protecting themselves from a possible setback (thanks to the stop order).
For buyers, this type of order lets them buy on a setback (the limit order) or when a level is crossed (thanks to the stop order).
| OCO sell | OCO buy | |
|---|---|---|
| Purpose | Control potential gains and losses simultaneously. | Buy on a setback or when a level is crossed. |
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Example |
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7.4. The trading account
To access your trading account click on Login Bank and enter your user ID and password. Then enter the four-digit code on the Level 3 access card when prompted.
soon as the system has identified you, access to the account will be granted.
The following overview shows the different sections of a trading account.
To access your trading account click on Login Bank and enter your user ID and password. Then enter the four-digit code on the Level 3 access card when prompted.
soon as the system has identified you, access to the account will be granted.
The following overview shows the different sections of a trading account.
