(C) Intraday trading Pros and Cons

The double sell / purchase of the same pack of shares within a day (intraday trading) is a common practice for the developed capital markets. Under Regulation 32, art.35, para. 2, the intermediaries in Bulgaria are required to confirm the availability of the securities subject to any deal with the Central Depository, all this at settlement of T+2. This requirement practically raises high barriers to a dynamic intraday trading on the Bulgarian Stock Exchange.

On one side the intraday trade stimulates the trading mood on the market, which is quite contrary to the pure investment decision making. On the other side, any existence of immediate investment decision alteration, any speculation or arbitrage opportunity is a premise for highly liquid, dynamic, saturated with high trading volumes market. The late is a cornerstone factor for improvement of the market environment, which stimulates transparency and flexibility, as well as fair market price, which represents the interest of all the market participants, not just the ones beyond T+2 settlement.

Having ambitions for development of the derivatives market in Bulgaria, we need to mention, that if the intraday trading improves the capital markets’ efficiency, for the derivatives markets it is a vital necessity.