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BIVA (Bolsa Institucional de Valores) is the second stock exchange in Mexico.

Objective: Increase competition in the Mexican stock market and improve financing options for companies.

OPEL is a trading system within BIVA in Mexico, based on technology provided by Nasdaq. Its main function is to facilitate electronic transactions of securities listed on BIVA. This system is designed to support various types of financial instruments and trading models, such as auctions, block trades, and continuous trading.

Benefits of the OPEL System:

Provides a comprehensive platform supporting all types of financial instruments.

Handles various trading models, including auctions, block trades, and continuous trading.

Offers extensive functionality for operations and types of orders.

Includes integrated risk management with trading and technological filters.

Characteristics of the OPEL System:

The OPEL System consists of five trading books, each with its own trading parameters and risk filters:

1. OPEL-E: Electronic Continuous Market

2. OPEL-C: Closing Trades

3. OPEL-B: Block Trades

4. OPEL-D: Debt Trading

5. OPEL-W: Optional Securities (Warrants)

Each book is designed to handle a specific type of transaction, allowing for greater specialization and efficiency in trading securities.

(2024). Modelos de negociación. Bolsa Institucional de Valores S.A. de C.V.: https://www.biva.mx/operaciones/modelos_de_negociacion

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What is the BMV Sentra? It is the Electronic Trading, Transaction, Registration, and Allocation System developed and managed by the Bolsa Mexicana de Valores (BMV), which allows for the electronic trading and operation of securities in the stock market. In 1996 it was used as a complement for the open outcry operations on the trading floor (this was the place where stock transactions were conducted verbally, with brokers shouting bids and offers to negotiate prices), but since January 11th, 1999, all transactions have been conducted exclusively through this system.

There exists:

BMV Sentra Equities, which is used for trading stocks and other equity instruments. (Shown in all three images).

BMV Sentra Debt Securities which is used for trading debt securities, like bonds and other fixed-income instruments. This last one, was introduced in 1995 and since then it has been the exclusive means for trading debt securites in the BMV.

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Refers to the different instruction’s investors can give to their broker to execute the purchase or sale of stocks or other securities. The main types of orders are:

Market order

It´s a trade order to purchase or sell a stock at the current market price. The individual does not control the amount paid for the stock purchase or sale. The price is set by the market.

Limit order

It´s a trade order to purchase or sell a stock at a specific set price or better. A limit order prevents investors from purchasing or selling stocks at a price that they do not want.

Stop order

It´s a trade order designed to limit an investor´s loss on a position. A stop order sells a stock when it reaches a certain price.

Stop-limit order

It combines the features of a stop and limit order. A stop-limit order requires placing two prices- the stop price and the limit price, it guarantees a price limit.

Day order

Specifies the timeframe of the order, the order must be executed during the same trading day that the order is placed

All or none order

Specifies that the entire size or the order be filled.

Fill-or-Kill order

Must be completed immediately and completely or not at all.

References

Team, C. (2024, August 1). Trade order. Corporate Finance Institute. https://corporatefinanceinstitute.com/resources/career-map/sell-side/capital-markets/trade-order/

Mitchell, C. (2024, February 9). What is an order? Definition, how it works, types, and example. Investopedia. https://www.investopedia.com/terms/o/order.asp

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In the BMV and BIVA financial systems, there are several types of stock market opearions that can be carried out, for example:

1. Spot Transactions: Transactions where the purchase and sale of securities are settled within 48 hours, for example, an investor buys 100 shares of Grupo Bimbo at $50 MXN per share. The transaction is settled in two business days, so the investor pays $5,000 MXN and receives the shares in their account.

2. Forward transactions: Transactions where settlement occurs on an agreed future date, for example, a company agrees to buy Mexican government bonds with a nominal value of $1,000,000 MXN, with settlement scheduled for 30 days later at an agreed price of $980,000 MXN.

3. Repo Transactions: Where the investors sells securities compromising to re-purchase them at a future date and agreed price, for example, a bank sells Mexican government bonds to another bank for $10,000,000 MXN with an agreement to repurchase them in a week at a price of $10,050,000 MXN. This provides short-term liquidity to the selling bank.

4. Short selling: Selling securities that the seller does not own, with the expectation of buying them again at a lower price before the settlement date, an example, to sell borrowed shares with the hope that their price will drop, allowing them to be bought back cheaper and returned. For instance, an investor believes Cemex shares will drop in price. They borrow 1,000 shares and sell them at $15 MXN each, obtaining $15,000 MXN. If the price drops to $12 MXN, they buy the shares back for $12,000 MXN, returning them and making a profit of $3,000 MXN.

5. Derivative transactions: Financial contracts whose value depends on the price of an underlying asset, for example, buying a futures contract on the price of oil.

6. Swap transactions: agreements to exchange future cash flows to specific terms, for example, an interest rate swap where two parties exchange interest payments, one at a fixed rate and the other one at a variable rate.

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Calzada, H. (October 3rd, 2016). ¿Qué es el sistema electrónico de negociación SENTRA Capitales? Rankia. https://www.rankia.mx/blog/como-comenzar-invertir-bolsa/3345395-que-sistema-electro-nico-negociacio-n-sentra-capitales

De La Garza, B. (March 29th, 2017). Bolsa Mexicana de Valores (BMV): requisitos, emisoras, índices y cómo invertir. Rankia. https://www.rankia.mx/blog/como-comenzar-invertir-bolsa/3520196-bolsa-mexicana-valores-bmv-requisitos-emisoras-indices-como-invertir

GBM. (November 16th, 2022). ¿Qué es la Bolsa Mexicana de Valores (BMV) y cómo funciona? GBM Academy. https://gbm.com/academy/que-es-la-bolsa-mexicana-de-valores/

Glosario B. (n/d). https://www.multiva.com.mx/glosariob