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Liquidity Type


According to different points of view and based on the transaction contract and its relationship with actual delivery, Pacific International Stock Exchange includes various means of exchange, such as actual transaction, forward transaction, futures transaction, repurchase transaction of bond, and credit transaction of contract for differences.

(I) Actual transaction
Actual transaction means that both parties handle the delivery procedures after the transaction, through which the buyer pays funds and obtains products, while the seller delivers products and gains funds. Therefore, actual transaction is characterized as "simultaneity of payment and delivery”, which means that the transaction is done in cash. The global stocks, funds and some bonds of Pacific International Stock Exchange belong to actual transaction. Some spot commodities and exchange members also belong to actual transaction, but most of them are influenced by the region, transportation, storage and logistics.

(II) Forward transaction and futures transaction
Forward transaction means that both parties reach an agreement to do the transaction at a certain moment (or within a certain period) in the future on the basis of the price determined at this moment; futures transaction indicates the standardized forward transaction done in the exchange. The futures contract is a standardized agreement signed by both counterparties and reached to deliver the certain number of commodity on a day in the future on the basis of the price agreed on the contract date.

Forward transaction and futures transaction have something in common, as both of them are delivered in the future after the agreement is reached. However, forward transaction is not standardized, but is done outside the exchange; while futures transaction is standardized, with standard contract signed, and is done within the exchange.
Actual transaction and forward transaction aim to obtain the object by means of exchange; as for futures transaction, physical delivery is not done in most cases, while reverse transaction and settlement by closing a position are done before the date due of the contract.

(III) Repurchase transaction
Repurchase transaction, characterized as short-term financing, combines the features of both actual transaction and forward transaction and is generally used in bond trading. The repurchase transaction of bond means that both parties involved in the bond trading reach an agreement to do reverse transaction at some time in the future on the basis of certain price when the transaction is done. During the repurchase transaction of bond, when the bond holder needs short-term funds, they can pledge or sell the bond to raise funds; in return, the funds supplier will obtain certain interests as a result of the use rights of funds transferred by them within the period.

(IV) Credit transaction
Credit transaction indicates the transaction done by the investor who obtains the credit of broker by paying the margin. Therefore, the main feature of credit transaction is that the broker provides credit to the investor, which means that a part of the securities or funds of the investor for selling the securities are borrowed from the broker. For example, the contract for differences of stock and index is credit transaction.