How to invest in the Turkish stock market – a comprehensive guide

Turkish stock market

When it comes to investing in the Turkish stock market, everyone thinks about the stock market.

The stock market is an integral part of the global economy and financial markets today began to expand in the seventeenth and eighteenth centuries.

However, many loan instruments have been traded, and commodities in stock markets in many parts of the world since the early ages of the stock market concept.

The history of establishing the stock market concept, All the way to Turkey:

According to various sources, the securities related to public and private debt instruments were on the Antwerp Stock Exchange in Belgium, which was founded in 1531. And was considered the first common stock exchange in the world.

The Amsterdam Stock Exchange, founded in 1602, is the first exchange we know. And the Chicago Mercantile Exchange was founded in the ninth century, the first commodity exchange in the modern sense made up of money and futures markets.

The first stock market in Turkey was established in rye, under the siege of the Kotia region, in the last years of the year 200 AD, by order of the Roman Emperor Diocletian.

The building called Aizanoi was used as a market for wheat at that time, and the prices were engraved on the rocks of the place.

The Istanbul Stock Market was established in 1926. And in 2013, with the merger of the Gold Exchange and the Long-Term Trading and Futures Exchange, the Istanbul Stock Market continued to operate.

Now in the age of cyberspace, you can easily access the Istanbul Stock Market investment tools online, using the advanced screens developed by the brokers, you can easily submit your requests.

Turkish stock market

What is the stock exchange ?

A stock exchange is a general term for regular and organized markets in which securities such as stocks, bonds, mutual funds, and other commodities such as oil, gold, and coffee are traded.

Stock markets are platforms where investment tools such as commodities or securities are traded according to specific rules to suit buyers and sellers, and where investors try to change short and long-term price deals, to make a profit.

While securities such as stocks, bonds, bills, and mutual funds are traded on the stock exchange, precious metals such as gold, silver, platinum and energy products including oil and natural gas are traded.

And divisions in the stock exchange, currencies and agricultural products such as coffee, cotton, and wheat are traded, contracts are bought and sold, futures and options are based on the underlying assets in the long-term trading markets.

So there are many investment tools in various exchanges, but when we use the term stock exchange in Turkey, we mean the same Istanbul Stock Exchange or 100 BIST for short.

Types of markets in Istanbul Stock Exchange, Turkey :

There are different types of markets on the Turkish Stock Exchange, and they all fall into one of the three main categories:

Stock market :

Which includes in itself several subgroups:

  • The National Market‌
  • Secondary national market
  • The Second National MarketiNg
  • New Economy Market (Bazaar)
  • ETF Market, Watch List (Bazaar), Wholesale Market, and Coupon Market‌ Rights Coupon Market

International market :

In 1997, with the acceptance of international bonds issued by the Vice President of the Treasury for Foreign Trade. The international bonds and documents market began its work, then the deposit receipts market on the Istanbul International Stock Exchange began with the beginning of deposit deposits on the International Exchange of the largest bank in Kazakhstan (Kazkommertsbank) in the depository receipts market  International and European bonds (Eurobonds) managed by the government of the Republic of Turkey, publishing and trading in the international bonds and documents market.

All operations in this market are in US dollars and settlement is done through Citibank and Euroclear and by Turkey’s central depository called Takas Bank.

Bond market :

The bond and stock market is a regulated market for trading in fixed income securities, and it consists of three parts:

  • Market buyback and reverse buyback agreements
  • One-time buying and selling market
  • real estate market

Turkish Derivatives Exchange ‌:

The Turkish Derivatives Exchange was established in 2002, in the year 2005 under the acronym TURKDEX, this exchange seeks to create, innovate and expand financial instruments that operate on risk to investors.

Conditions of investment in the Turkish stock exchange :

The first thing that investors wanting to invest in a commodity exchange should do is find a broker and open an investment account in a bank licensed by the SPK (Stock Exchange Board).

Turkish stock market

How do I open an account to invest in the Turkish stock exchange ?

Before opening an account, you can visit the official website of SPK (the stock exchange board) and see the current list of brokers and banks that have a SPK license and are allowed to trade on the commodity exchange.

It is recommended to choose the brokerage company that provides the most suitable conditions for you by comparing the conditions of brokerage services, transaction fees and commission rates, other costs and brokerage house discounts are on this list.

It is very important that the broker you choose meets your expectations, because you must perform all trading operations on the commodity exchange through the broker where you will open your investment account.

Your investment account will be activated when you personally visit one of your brokerage branches, read and sign the brokerage services framework agreement and the risk notification form for capital market transactions.

After transferring funds to your account, you can enter your requests on the investment platform of the aforementioned brokerage firm and trade on the exchange.

What is the risk notification form for stock exchange in Turkey ?

Risk notification forms are documents prepared to inform the investor of the risks associated with various stock market instruments.

SPK has made it mandatory for investors who want to open an investment account to understand and sign their risk notification forms.

All investors who open an investment account must sign the public capital market instruments risk reporting form.

In addition, investors who wish to invest in derivatives and collateral instruments must sign risk forms related to derivatives and collateral instruments.

What is trading on the commodity exchange?

Investors in the stock market place their buy and sell orders through the online investment trading platform provided by the brokerage. And trades are made when orders automatically match the quantity and price orders can be sent via phone, fax or in person.

In order to fulfill the buy order that the investor transfers, the sale order must be sent to the exchange at the same price to fulfill this order execution of orders on the commodity exchange depends on the compatibility between supply and demand.

Depending on the investor’s preference, stock offers and orders that have not been fulfilled at the end will be canceled today or waiting for the buyer.

How to make money on the commodity exchange ?

  • If you want to invest your savings in a commodity exchange and make more profits from your passive income, instead of keeping your savings or large funds in long-term deposit accounts as a passive source of income, you can open an investment account with a stockbroker and buy investment tools that you expect to increase in price.
  • If the price of the stock that was purchased to invest in the Turkish stock exchange increases according to your estimates, you can make a profit by selling the stock at the price you want and make your profits
  • If you create a balanced portfolio by diversifying your investments, you can manage it by spreading it to reduce your risks and increase your profits.
  • In order to be able to get accurate stock price estimates when purchasing your portfolio, you need to monitor the price movement of traded stocks in the market for a period of time and carefully research companies’ financial data and forecasts of their growth and profitability.

Read More about how much it costs to start a business in Turkey