In a simple definition, a stock market is a central place that brings together governments and corporations so that shareholders can purchase and sell stocks. It is the largest market in the world and is basically a marketplace where traders can buy and sell securities as well as other financial assets. The stock market is a place where trading of securities is done either by dealing directly with the public or by brokers who hold an account on behalf of the trader. A stock market is also where many other financial instruments are traded including derivatives, bonds, equities and commodities. Check out 引伸波幅.
To begin trading, an investor will have to register with the stock exchange so as to trade in the securities. This process is known as market making and the buying and selling of shares, called ‘trading’. An investor can buy shares from the company they are interested in through a broker. Trading is usually done in two ways – directly with the public where traders make purchases and sells shares themselves and indirectly through brokers who purchase shares from the company and sell them to investors. This last method is called’sell and rent’. Stock exchange trading also involves borrowing money from financial institutions for the purpose of trading and if such borrowing is allowed, it is known as ‘off market’ trading.
Many people think that stock markets only deal with trading shares and with little else. This is not true because although stock exchanges tend to be small, they are made up of networks of traders. These traders are responsible for making the decisions about when to buy, sell and when to sell the stocks they own.
Most stock exchanges today have online services for traders who use the internet for making transactions. Traders can use their computers and the various software programs that are available online to access their accounts. Traders need to register with the stock exchanges in order to open trading accounts. Investors need to find a brokerage firm that deals with the kind of shares they want to trade. They can then go online to check out the available stock exchanges and decide which one they wish to do business with.
The process of buying and selling of stocks on stock exchanges is usually done through brokers who have been appointed by the investors. The buyers and sellers will sit in front of each other and make the deal. The buyers are known as ‘oners’ and the sellers are referred to as ‘offsers’. The process goes like this: The buyer decides on a price that they are willing to pay for the shares and the seller agrees to buy those shares. Once an agreement has been reached, the seller is now known as a ‘broker’ and the buyer becomes a’seller.’
In the United States, there are three exchanges that are commonly known as the Nasdaq, the New York Stock Exchange (NYSE) and the London Stock Exchange (LSE). The Nasdaq is considered to be one of the most well known stock exchanges in the world. It is the primary stock exchange where all publicly traded companies are listed. The New York Stock Exchange is an American exchange where it trades stocks for common stocks only.
There are a number of different kinds of shares that can be bought and sold on these stock exchanges. These include the ‘bought’ shares or the’sold’ shares, the ‘new’ and the ‘existing’ shares and finally, the ‘futures’ and the ‘put’ options. Most of the investors trade these stocks via their brokers. Some investors also use online trading platforms that allow them to buy and sell shares without ever being present at the exchange itself. Many people are familiar with trading stocks via the Internet and most often use online platforms.
When purchasing or selling shares on these stock exchanges, both buyers and sellers must be registered members. As soon as they become registered members, they can then access the exchange and make purchases and sells shares. Brokers play a pivotal role in facilitating trades on these stock exchanges. They connect buyers and sellers and act as intermediates between them. Traders and other individual buyers and sellers as well as institutional investors use the services of the brokers.