What Is Stock Market?
What Is Stock Market?Some people really get confused between stock market and Financial Markets but they are not completely the same. In simple words a Stock market is a place where stocks, bonds, options and futures, and commodities are traded. Buyers and sellers exchange trade together via platform provided by stock exchange through computers. Trades are done during specific hours on business days Monday Friday.
Unfortunately, the answer to this simple question is rather complicated, and can not readily be summed up in one sentence. Indeed, many traders may be hard pushed to articulate exactly what a stock market is and the purpose it serves, even after years of serious trading. In this article, we are going to attempt to clear up the ambiguity, and offer a direct and succinct answer to this most foundational of trading questions.
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Most people understand that a stock market / stock exchange is a place where shares are bought and sold, and in essence this is true. Most people understand a stock market is dominated by traders who speculate on the price of shares to make a profit on the difference between the buying and selling price, and in essence this is true. But a stock is so much more in-depth than these two basic propositions would suggest, and requires some deeper analysis to get to the bottom of what's really going on. Their are various Methods Of Buying and various Methods Of Selling.
A stock market is a primarily a virtual exchange of securities (that is, shares and debentures, which companies use as a means of raising finance) and derivatives (i.e. virtual instruments such as contracts that relate to assets and securities and can be traded).
It is virtual in the sense that the market is an intangible concept, rather than a physical place, and as a result of advancing technologies traders can now get involved with little more than a laptop or mobile phone. The market brings together a range of traders of all shapes and sizes - from small, one-man bands trading for their own personal gains through to hedge funds managing billions in assets, and everything in between. Their are various Trading Methods In Stock Market
Stock markets / stock exchange list the securities of publicly traded companies, identified in the UK by the appendage 'plc'. As distinct from a regular limited company ('Ltd.'), plc's offer their shares to the public at large, who are generally concerned with trading on the price point of a given share rather than its yield. Shares can change hands several times on a daily basis, and at insignificant levels the company is unconcerned with who owns those shares.
Shares themselves are intangible assets, entitling the bearer to an annual payment known as a 'dividend', paid out of distributable profits, and often corresponding voting rights in proportion to the size of the share held at the AGM, where major strategic decisions such as electing the board are put to the vote. The bearer of a share at any given point is in effect a part owner of the business to which those shares pertain, and it is this aspect that gives a share any underlying value
The price of a share at any given stage is dictated by supply and demand within the market, and rises or falls every time a share is bought or sold. This effectively means that shares are priced by the collective will and attitudes of the market, comprised of all the traders and investment houses that actively trade in those securities.
The price of a share at any given stage is dictated by supply and demand within the market, and rises or falls every time a share is bought or sold. This effectively means that shares are priced by the collective will and attitudes of the market, comprised of all the traders and investment houses that actively trade in those securities. It is also necessary to follow some golden rule for trading in stock market.
Stock markets generally trade over a set duration of hours, usually reflecting the working day in their particular region, allowing the zealous trader to trade different markets round the clock - from London to New York to Tokyo - while affording those companies so listed to raise capital in the form of initial share issues to the market. As a result, the markets operate on a slick basis almost around the clock, bringing together buyers and sellers of securities and giving businesses and governments a free, unadulterated bellwether for the economic and commercial outlook of a given sector, industry or economy.
In essence, that's the foundation of what a stock market is, and it's by no means a comprehensive study. Getting to know the markets requires lengthy research and an understanding of business, economics, law and politics. Yet for those that do get to grips with how the markets operate, the allure of trading profits is sufficient rewards for all their hard work.