Exchange rate value

The price established during the sale and purchase of a security is considered to be the exchange rate value of that security at a given time.

Securities are often bought and sold by their owners. While one of the most important characteristics of a security at its "birth", i.e. at the moment of its issue, is its nominal/face value, later on during trading, its exchange rate becomes very important. This is called the exchange rate on the securities market.

The exchange rate value is therefore the current market price of the given security. In principle, the given paper can be bought or sold for this amount at the given moment. The transaction can take place on the stock exchange or over the over-the-counter.

A large number of investors are constantly watching these exchange rates, which are sometimes published daily, sometimes even every second. Based on the historical short, medium-, or even longer-term movements of these exchange rates, a number of securities market analysts try to provide the best possible forecasts for the future. This branch of securities market analysis is called technical analysis. The estimation of the fair value of companies, based on management data, is called fundamental analysis.

The exchange value has another essential role: if the exchange value is multiplied by the number of public limited company of a given joint-stock company, we get the value of the entire company. This value is also called the market capitalisation of the company.