The subject that we will address in this memo may be the turning point of Tehran Stock Exchange transactions in recent days. It has always been rumored that the hands behind the scenes in the stock market direct a large amount of money to themselves, and most of this money is from small shareholders, and we see that it has left the market as it is today. In this note, we will address the issue of market impact or impact market and explain its advantages and disadvantages. Please be with Artan Press.
*** Impact of Impact Market on the stock market
It should be noted that the impact of the market is an indicator by which the flow of sales by major shareholders and generally legal entities will be eliminated and will not allow the exit of shares at once. By implementing the market impact method, according to the trading history of each share, the quorum for legal sales in each symbol is determined. Therefore, small trades are not affected by large legal trades and small trades are possible without the influence of large trades. Rights to sell large numbers of stocks must go to the block trading board. This greatly increases the risk of withdrawals for a short period of time for a legal entity.
*** Impact Market Operation Background
From the beginning of February, in the board meeting of the stock exchange company, the subject of Impact market was approved with optimal changes and corrections and was referred to the stock exchange organization. This can be good news for the stock market as a whole, and as we have seen in the market over the past three days, sales have fallen sharply and shareholders are preparing for further growth in their overall index.
*** Reasons for increasing the risk of large shareholders in Impact Market
Impact Market has a path to the black market of the stock exchange and this issue will not be the choice of major shareholders at all because in this market the prices offered by the buyers are offered and the shareholder’s hand is closed for sale at the optimal price. Impact Market seeks to set a quorum for each symbol and, based on the history of each stock, does not allow buyers and sellers to trade above a certain quorum. For example, if a company’s quota is 12 million shares, anyone who wants to trade more than 12 million shares must trade in the block market or the dark market.
*** Experience of global markets in Impact Market
But the question arises whether the implementation of the Impact Market mechanism in the world has already been raised and has created this situation with the creativity of policy makers in the Iranian stock market? In response, it should be said that this plan has a global history and more than 30 to 40% of Dark transactions are done in the world, and these quotas also exist in the world’s reputable stock exchanges.
*** The market impact factor is not the last resort
One should not expect that this project will be one hundred percent highly productive with market profits. Rather, each design has its own positive and negative aspects. Although no plan is completely flawless, this plan is very useful and it seems that it can help the stock trading process so that it is not affected by the transactions of the market leaders and about 5 to 10% of the market transactions are transferred to the block market. Details will be announced through official sources after approval by the Exchange Organization.
*** Urgency in implementing the Impact Market technique
This plan also has urgencies to implement. As soon as it is approved by the Exchange Impact Exchange Organization, it will be implemented in the coming days. The numbers considered for the Impact Market are considered by the Exchange Organization based on the trading history and the daily trading volume of each share. This can be very effective in controlling the irrational supply of legal products in the market and is very good news for the market. The plan is expected to have a significant impact on legal violations.
*** How to implement Impact Market
In this plan, the quorum for the separation of institutional transactions in both normal and block markets will be reviewed periodically and the effectiveness of this mechanism will be enhanced during certain time periods. Impact Market will be implemented in the coming days. This can be very effective in controlling the irrational supply of legal entities in the market and is very good news for the market. But the negative aspects of this technique should also be noted. This issue can create a false silence in the stock market and reduce the trading volume. This issue causes the volume of stock bases to not be filled and the profit and loss percentages do not appear to be real.
*** Impact market from the point of view of stock market activists
The head of the stock exchange organization had previously spoken about using the Impact Market approach. He acknowledged that about two months ago, in cooperation with the Bazaar and the Tehran Stock Exchange Development Deputy, a project called Market Impact was introduced, which the board of the Tehran Stock Exchange also agreed with the general plan.
*** Motivation of the stock exchange organization to implement the market impact
But the question that arises is why the stock exchange organization went to this decision and what was the motivation of these manufacturers to implement the Impact Market technique? The answer is that the many violations that have taken place in the field of law and marketing in recent years was a factor in entering this professional tactic in the Iranian stock market. So far, more than 120 cases of violations in the field of marketing have been investigated, about 400 cases of marketing transactions and more than 100 cases of suspicious transactions.
*** Fuzzy logic in stock market monitoring systems
Discussion of limitation and review of online codes, trading stations, discussion of coordinated transactions are all done through the control systems of the stock exchange organization. Monitoring does not have a logic of zero and one, but The logic is fuzzy, it may not mean that the stock market is not monitored. But the fact is that the ways to break the law in a situation where data is scarce are higher than in a quality market. The fact is that we have systems that report to the observer moment by moment. After these systems can be used for successful implementation of Impact Market.
*** Tracking of violators in stock exchange monitoring systems
Supervisors of the Tehran Stock Exchange, OTC and Stock Exchange Organization, as soon as the transaction is done, can see with the name and details of which brokerage has traded at what volume and price, the system is a significant advanced system based on artificial intelligence and all Outputs that monitors want to extract and check by coding. There are various systems in the marketplace where the supervisor can enter and enforce the law, everything in the trading instructions and regulations, and whatever regulators want.
*** Impact Market Successful approach in Iran Stock Exchange
The entry of the stock market into the Impact Market debate should be welcomed, because ordinary people have suffered a lot of financial losses in recent months from legal behavior, and no tool such as market influence could pave the way for the stock market to trust. This technique can Assist the stock market and guide the pricing path to realism. Imagine that a legal entity can not increase or decrease the stock price at once without support. It remains to be seen how the legal entities of the market will react to this behavior. Will give.
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