trading securities

Examples of trading securities in the following topics:

• Accounting for Sale of Debt

  • How debt sales are recorded depends on whether the debt is classified as "held-to-maturity," "a trading security," or "available-for-sale".
  • Unlike trading securities, the unrealized gain is recorded in the equity section of the balance sheet and does not effect the current year income statement at all.
  • This is because, unlike trading securities, the loss from an available-for-sale security is not expected to be realized in the near future.
  • Debt securities can be classified as "held-to-maturity," a "trading security," or "available-for-sale. "
  • Summarize how to record the sale of a held-to-maturity, trading security and available for sale debt

• Securities Exchange Act of 1934

  • The Securities Exchange Act of 1934 is a law governing the secondary trading of securities, financial markets and their participants.
  • The Securities Exchange Act of 1934 (also called the Exchange Act, '34 Act, or Act of '34) is a law governing the secondary trading of securities, including stocks, bonds, and debentures, in the United States of America.
  • The '34 Act also regulates broker-dealers without a status for trading securities.
  • In the last 30 years, brokers have created two additional systems for trading securities.
  • The '34 Act extends this requirement to securities traded in the secondary market.

• Accounting Methodologies: Amortized Cost, Fair Value, and Equity

  • If a business holds debt securities to maturity with the intent to sell are classified as held-to-maturity securities.
  • Held to maturity securities are reported at amortized cost less impairment.
  • Debt and equity securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities.
  • Debt and equity securities not classified as either held-to-maturity securities or trading securities are classified as available-for-sale securities.
  • The ownership of less than 20% creates an investment position carried at historic book or fair market value (if available for sale or held for trading) in the investor's balance sheet.

• National Security Argument

  • National security protectionist arguments pertain to the risk of dependency upon other nations for economic sustainability.
  • This results in a substantial national security threat in the form of conflicting or offensive trade strategies between countries.
  • This is a fundamental foundation for the trade protectionism logic from a national security perspective.
  • Combining these ideas, it is clear that there is substantial national security value to trade protectionism.
  • Evaluate the arguments in favor of the use of trade protectionism in the security industry

• Types of Market Organizations

  • There are three main types of market organization that facilitate trading of securities: auction market, brokered market, and dealer market.
  • The securities market is an economic institute where sale and purchase transactions of securities between subjects of economy take place according to demand and supply.
  • The primary market is the part of the capital markets that deals with the issue of new securities.
  • In the U.S., over-the-counter trading in stock is carried out by market makers that make markets in OTCBB and Pink Sheets securities using inter-dealer quotation services such as Pink Quote (operated by Pink OTC Markets) and the OTC Bulletin Board (OTCBB).
  • There are three main types of market organization that facilitate the trading of securities: an auction market, a brokered market, and a dealer market.

• Securities Act of 1933

  • If person A registers a sale of securities to person B, and then person B seeks to resell those securities, person B must still either file a registration statement or find an available exemption.
  • Many transactions are exempt from regulation under the Securities Act.
  • the average weekly reported volume of trading in the securities on all national securities exchanges for the preceding four weeks
  • the average weekly volume of trading of the securities reported through the consolidated transactions reporting system (NASDAQ)
  • Securities and Exchange Commission (frequently abbreviated SEC) is a federal agency, which holds primary responsibility for enforcing the federal securities laws and regulating the securities industry

• Global Trade: Inequalities and Conflict

  • Global trade (exchange across international borders) has increased with better transportation and governments adopting free trade.
  • The United States is party to many trade agreements, but one of the best known is the North America Free Trade Agreement (NAFTA).
  • But as trade has become more global and more complex, trade negotiations have expanded to include more countries.
  • Sociopolitical arguments against free trade cite social and political effects that economic arguments do not capture, such as political stability, national security, human rights, and environmental protection.
  • Critics note that free trade undermines cultural diversity, causes dislocation and pain, and undermines national security.

• The Regulators

  • The Securities and Exchange Commission (SEC), which was created in 1934, is the principal regulator of securities markets in the United States.
  • Before 1929, individual states regulated securities activities.
  • The Securities Act of 1933 and the Securities Exchange Act of 1934 consequently gave the federal government a preeminent role in protecting small investors from fraud and making it easier for them to understand companies' financial reports.
  • The agency also seeks to prevent insiders from trading in stock based on information that has not yet become public.
  • The Commodity Futures Trading Commission oversees the futures markets.

• National Security Policy

  • National security policies, designed to protect the state, include military security as well as non-military security.
  • In order to possess national security, a nation needs to possess economic security, energy security, and environmental security, in addition to a strong military.
  • Economic security is also a part of national security.
  • In today's complex system of international trade, characterized by multi-national agreements, mutual inter-dependence, and limited natural resources, economic security refers to whether or not a nation is free to develop its own economy in the manner desired.
  • Economic security today is, arguably, as important a part of national security as military security.

• The Argument for Barriers

  • But it is also true that workers in export industries benefit from trade.
  • Was trade the force behind this deteriorating wage performance?
  • Some industries, or at least components of some industries, are vital to national security and possibly may need to be insulated from the vicissitudes of international market forces.
  • This determination needs to be made on a case-by-case basis since the claim is made by some who do not meet national security criteria.
  • Controlling such exports is clearly justified from a national security standpoint; but, it does come at the cost of lost export sales and an economic loss to the nation.