11 May 2020

What is Stock Market and Stock Exchanges

By DICC Institute

What is the stock market?

The stock market is a market place where one can buy or sell financial securities. It trades different asset classes such as stocks, bonds, commodities, derivatives and futures. Some stock exchanges are specialized only in a field such as commodities or futures contracts but the majority of stock exchanges are stock exchanges (stock, bond and derivative).

In this stock market the buyers and sellers do not come into contact directly. The transactions are carried out via a system for placing stock market orders, via stock exchanges. The orders are sent to a clearing house (a sort of trusted third party) which subsequently delivered the securities to the buyer and the money delivered to the seller. This complex system allows buyers and sellers to evolve in a perfectly secure environment.

The stock exchange provides continuous listing on the various assets it covers. These prices are the result of the confrontation of supply and demand. A regulatory body comes to control transactions on the stock exchange to ensure that none of the parties (buyers or sellers) have been privileged.

Stock market Exchanges

Each country has its own stock exchange. Some stock exchanges are much more active than others in terms of trading volumes. This is the case, for example, of the National stock Exchange (known as NSE), Indian Stock Exchange, the London Stock Exchange are considered to be the active ones while The Paris stock exchange is much less active than the latter.

Stock market source of funding

The model of a stock exchange allows the companies to launch their shares in the stock market. There are companies looking for capital to develop their business and investors are looking to grow their money. The stock market is therefore provides a platform between the companies and individuals who would like to invest. Stock Market thus becomes an essential platform for the proper functioning of our economy. It also allows individuals and institutions to become partners in companies by purchasing shares.

The stock market is also a financing tool through bonds. With the issuance of bonds, states and companies borrow financial markets. Instead of borrowing money from a bank, they borrow from investors (individuals or institutions). The Stock Exchange therefore allows an individual to become a creditor of a company or a State.

Join Stock Market Course of DICC to start work in the stock market and start making money.

Please follow and like us: