A stock market or share market or we can say and equity market is a platform where the buyer and sellers of shares or stock come in contact for buying and selling of the stocks or shares these may also include the public stock exchange as well as the deals related to that of the private Stock Exchange
Stock exchange is a very important point where comes in the stock brokers and traders who are engaged in the buying and selling share or bonds or any other security the stock brokers help the traders in buying and selling of the stocks. Up to this date many companies have registered then sell under the stock exchange so that public can buy and sell their shares from which they can get capital which makes the stock market more liquid and more attractive to a large number of investors.
The stock exchange cover a last type of security such as bonds, OTC’s, fixed interest security, preference shares, equity shares, etc. This trading in the stock market means the exchange of money or stocks more security among the buyers and sellers. This requires that the two parties agree at some point the equity confirm an ownership interest in a particular company means that the equity of a particular company make one a partner among the partners of the company.
In this Stock Exchange the buyer bits and ask the potential owner of the share a specific price for a certain amount of stock the buying and selling at a market means that the buyer will accept any price or the bed price for the stock. This is our held on the basis of First Come First serve where if one one buyer try try to pay 1000 rupees for one share and the share is sold while after sometime if someone ask the seller for the same share at 1200 Rupees then this does not mean that the the seller will sell the shares to the next one and bring the contract to a null with the first buyer.
As it is obvious that the people trading in stocks would prefer to trade on the most popular exchange since it gives a large number of potential sellers and buyers of and for stocks.
The market participants include many things such as pension funds insurance companies Mutual Funds index funds exchange traded funds heads funds institutional investors retail investors and also the publicly traded corporations trading on the shares.
There are two type of investment in this market participation such as:
[ ] Indirect investment
[ ] Direct investment
Indirect investment include the shares that are indirectly involved such as the fun share s which are owned through a friend or some other trusted investors these include shares like Mutual Funds, or exchange credit funds etc.
Where as on the other hand direct investment are those that involve the direct ownership of the shares.
Function and purpose of the stock market.
The main function of the stock market is very important for the companies as it allows them to get the capital for the investment in the business through the public just by simply giving them some share of the profit earn by these companies and making these shareholders the one of the partner of the company whose shares are with that particular which is in case of the preference share it help the companies in determining there goodwill and also the popularity for the company which increases the value of the share each time bought and sold.
History has shown that the prices of the stocks and the other assets can be counted as a very important part of dynamics of economic activity which can be an indicator of social mood sometimes these these prices increase and decrease of the share market for a particular share make the particular shareholder rich and sometimes it affects the shareholder in a negative way leading to its bankruptcy and losing all the shares that he h…