Detailed Information on Publication Record

This paper deals with the development of the first financial derivatives traded on the Prague Stock Exchange during the interwar period. This period was chosen conceptually because the first independent stock exchange, which still contained many elements taken from Vienna’s Stock Exchange, was created. In this period, the Czechoslovak Republic was founded and from the economic point of view it was necessary to ensure the existence of a capital market where companies could obtain their capital for development, which was very important in this period, because for example Škoda factories, as the flagship of the then industry during the first world war, were transformed into a war industrial complex and after the war there was not enough demand for this type of production. Furthermore, it was necessary to secure the financing of operating needs as companies faced a lack of liquid money due to bad debts, in particular for arms supplies during the war, which Vienna was unable to pay. In this period, it was traded through the main exchange channel the so-called „šraňk“ where the best těles of the bourse were traded, also with a prospective development of options contracts. They traded „stelaže“, „donty“ (that have the character of today’s options), premiums on individual titles of the Prague Bourse, golden rents, where the underlying asset were bonds. During this period, a great progress in the development of the capital market in Czechoslovakia is visible, as well as signs of regulation of some bourse transactions. The aim of the paper is to provide a comprehensive description of the trading of financial derivatives at the Prague Stock Exchange in the interwar period.