Common and important forex concepts and terms

Securities, as the name suggests, are papers that have financial value. These sheets can be transferred or bought and sold. Securities can include stocks, preemptive rights, partnership bonds, trading options. But when we talk about the capital market, partnership bonds are divided into three parts: equity bonds, debt bonds, and derivative bonds.

Equity securities:  Equity securities are called “shares” in short. If we divide the capital of a company or institution into equal parts, each part is one share of the total shares of that company. By buying this share, you become the legal owner of a part of the company and you can sell your shares whenever you want.

Debt bonds:  Debt bonds include bonds that are sold to finance projects. In fact, when companies do not have enough financial resources to implement or complete their projects, instead of going to banks, they provide the necessary resources by selling these bonds themselves.

Derivatives:  Derivatives are a type of financial contracts whose value is based on some commodities and underlying assets. This is why they are called derivatives. The price of these bonds is determined based on the change in the price of that commodity or asset.

Forex:  The stock market is a special market where a large number of sellers and buyers are engaged in buying and selling. A stock exchange is a market where securities are traded. In fact, this market is a reference for collecting the capital of individuals and private sectors in order to provide financial resources for long-term investment projects, and at the same time, a part of the profit will be earned by its investors.
To see the real-time value of this market, you can refer to the “Index” page of Rahvard 365 website. In addition, on this page, the value of different markets according to industries, the first market, the second market and the index of the top 50 listed companies are also mentioned.

If we divide the capital of a company into small and equal parts, each of these parts is called a share and the sum of them is called the shares of that company. By buying and selling these shares between people, they actually buy a part of the company’s ownership. Companies whose shares are divided in this way are called joint stock companies.

These companies can be registered as private shares or public shares. Private equity companies are companies that have all their capital provided by the founders at the time of establishment. The number of these partners should not be less than three people. But public stock companies are companies whose founders provide part of the company’s capital through the sale of shares to the public. Like any of the companies whose shares can be bought and sold in the stock or over-the-counter markets.

If you want to learn about the types of companies and the conditions of each of them, read the article “Getting to know the types of companies”. You can see the list of all the companies that are in the stock market on the “Stocks” page of the Rahvard 365 website. On this page, information such as the daily price of the companies’ shares, the volume and total value of their shares and many other information about their shares can be seen.

The capital market, also known as the stock exchange, is a market for buying and selling bonds and equity securities. The main job of this market is to create a bridge between capital providers and companies that are seeking capital. The capital market actually facilitates the process of buying and selling financial instruments such as treasury bills, commercial papers and certificates of deposit. The most significant financial instrument of this market is property bonds, which are mostly known as shares. In Iran, this market is divided into four types:

Forex and securities market  where buying and selling of company shares or government bonds or private institutions is done.

The Iran Exchange  , which started its activity in 2008, and many economic enterprises that do not have the conditions for admission to the stock exchange, can be accepted in this market with easier conditions.

Commodity forex  , as in which the suppliers offer their own goods and the goods are offered to buyers after expert reviews and pricing.

Energy Forex , where energy carriers and securities based on it are traded.

Every company may need more financial resources in addition to its own capital. One of the ways that companies can get these resources is to raise capital. When a company decides to increase its capital in the stock exchange, it must issue a number of new shares and sell them to shareholders to provide the amount needed for the capital increase. Capital increase of companies in the stock market is done in several ways:

The first method  is to increase the capital from the accumulated profit of the company. In this method, the company increases its capital from the profits it has kept in its accumulated account since the last financial years. Of course, in this method, new cash flow does not enter the company.

The second method  of capital increase is from the cash flow and shareholders’ claims. In this method, the company obtains new financial resources by selling new shares and thus increases its capital.

The third method  of increasing capital is from revaluation of companies’ assets. In this way, the company evaluates its fixed assets such as land, machinery and buildings at the new price, and considering that inflation usually causes the price of the company’s assets to rise, the value of the assets and as a result the capital of the company increases.

The fourth method  is to increase capital by using shares. In this way, the company sells its shares through subscription and for an amount higher than its nominal price, and transfers the difference between the sale price and the nominal price of the shares to the savings account, and in exchange, gives new shares to the previous shareholders.

If you want to get information about the capital increase of stock companies and to know its history and type, you can enter the name of your desired company in the search field through the Rahvard 365 website. Then, from the basic section, select the capital increase section and access the information you need. If you want to find more and more complete information about capital increase and its types, you can read the article “Types of capital increase methods”.

Supply is the amount of a product or service that a producer is willing to supply at a given price. In fact, the supply indicates the amount brought by the market. On the other hand, demand refers to the quantity of a product or service that is desirable for buyers. In other words, quantity demanded is the quantity of a product or service that people are willing to buy at a certain price. The price of any product or service in the market is a reflection of its supply and demand.

If the supply is more than the demand, the supplier is forced to reduce the price, and on the contrary, if the demand is more than the supply, the price grows. In economics, the state where supply and demand are equal is called the equilibrium point. The rise and fall of prices in the capital market depends to a great extent on this supply and demand. In the stock market, the order board is called the supply and demand board.

In this market, at any price, buyers determine how many shares they are willing to buy and sellers determine how many shares they are willing to sell. Whenever the price determined by the buyer and seller is the same, the transaction is done. When the number of buyers increases, in order to compete with each other, they are willing to make purchases at a higher price so that they can be ahead of others in the shopping queue. This high demand makes the price go higher and higher.

On the contrary, this may also happen to sellers. That is, because of the low demand, they are willing to lower the price and thus the stock price goes down. Therefore, the amount of supply and demand on stocks also makes the price of a stock go up or down. If you want to follow the supply and demand of different stocks, you can search for the stocks you want on the Rahvard site and see the supply and demand of that stock in real time.