Stock Trading Indices: A Mechanism for Attracting Speculative Capital

Abstract

AbstractThe article is devoted to the study of stock exchange trading in stock indices as a tool for attracting speculative capital to the market in Ukraine. Reasonably, the investment process takes place through the purchase of an ordinary index share issued by an investment fund. Investors who buy this share receive a profit not only from the exchange rate difference of the share, but also on the payment of dividends by the fund. The stock market of Ukraine is at the stage of formation and development, so it has many problems and shortcomings. One of these disadvantages is the lack of opportunities to trade exchange-traded stock indices. The authors draw conclusions based on the fact that in order to implement the proposal of legislative regulation, the government needs to adopt a law on futures trading, which should contain a definition of the contract market, a definition of the futures exchange. Also create an administration for stock futures contracts within the Department of the Stock Market and Securities of Ukraine, which today exists as the National Securities and Stock Market Commission. The authors have proved that trading stock indices can be very attractive for a trader due to the fact that the index, in its essence, is a widely diversified financial instrument.KeywordsForwardFuturesCommodity derivativesHedging instrumentsRisksSpeculation