Australian Bond Exchange

Automated trading and High Frequency Trading

Automated trading and High Frequency Traders (Algorithmic Trading) have emerged over the past decade as financial market have become more and more automated. These computers programmes have completely replaced the human specialists, or designated market makers as they were referred to. Automated trading has taken over the market. It’s rare now to have a human […]

How trading stocks works

Following on from the previous post, the general process of trading stocks on an exchange is that an order comes through a broker or online platform. That broker then posts to the exchange at what price he wants to buy (bid) or sell (ask) the stock. If another market participant is willing to accept the […]

How are stocks traded?

Most stocks are traded on one or more exchanges. A place where buyers and sellers can meet and decide on a price. Originally this was the place where buyers and sellers were meeting in person, but now most exchanges are automated in rooms full of computer servers. The purpose of an exchange is to facilitate […]

What are shares worth?

That depends on what people are willing to pay for them. A large portion of what people think a stock is worth is based on earnings and earnings expectations. This includes what a company has earned, what it is earning currently and what it might earn in the future. So, it’s not just a random […]

What are stocks or shares?

The shares/stocks represent the ownership of a company. If that company has issued 10,000 shares and you own let’s say 100 shares, this means that you own 1% of that company. You are a shareholder. Some companies only have a few shares, others have millions of shares and hundreds of thousands of shareholders or owners. […]

Yield to Maturity vs Coupon

Yield to maturity and coupon rate are the two main measures you need to take into account when evaluating bonds for investment. The coupon rate shows you what your annual return from the bond will be and that means you are able adequately to plan your income into the future. Every bond will show you […]

Premium and Discount bonds

Discount Bonds and Premium Bonds

Are you aware of the difference between premium bonds and discount bonds? Investors purchasing Bonds on the primary market (the initial issue of the bond) usually pay the face value of the bond which is usually but not always $100. After that, on the secondary market, the price of the bond will fluctuate mainly due […]

Major factors impacting bond price movements

The price of bonds are impacted by various factors. Some are due to the economic and market conditions, and some that are related to the bond and issuer. Investors Interest: During economic uncertainty, some investors may reduce their investment in equities and increase their focus on safer income style investments like bonds. This will increase […]

Beginners guide to Bonds

A bond is a form of debt and allows companies to raise money from the general public instead of going to the banks. The companies in return pay an agreed interest rate to the investor of the bond. Why invest in bonds? Generally a bond returns a regular, guaranteed income for the term of the […]