The stock market refers to the public marketplaces for issuance, purchase, and sale
of stocks through a stock exchange or over-the-counter (OTC). In another word, it’s
a marketplace where the shares of pubic listed companies are traded. Stocks are also known as equities and reflect a company’s ownership is a marketplace where investors may purchase and sell ownership of such financial assets. A well-functioning stock market is considered as vital to the development of the economy because it allows companies to easily access funds from the public.
The stock market permits various traders to meet, connect, and transfer. It also
shows the current value of shares of companies and act as a measuring point of the
economy. The number of participants in the stock market is very high and one can
regularly be guaranteed of a reasonable cost and a high level of liquidity as members
compete with each for the best price.
Basically, the stock markets provide a secured and organized atmosphere where the
traders can transfer in shares with confidence in minimum or no risk.
Working under the characterized rules as expressed by the controller, the securities
exchanges go about as essential business sectors and auxiliary business sectors. The
stock markets have ‘primary’ and ‘secondary’ markets which are functioning under
certain rules set by the regulator.
The stock market allows the companies to sell their shares to public initially through
Initial Public Offering (IPO). It helps the companies to raise the necessary funds to
function the company. And the investors get the shares based on their fund. The
shares offered in IPOs are most generally bought by large institutional investors
similar as pension finances or collective fund companies.
The stock market indexes shows the overall performance of various stock markets.
These index are designed to reflect to show how well the stocks are performing.
Stock request indicators themselves are traded in the form of options and futures
contracts, which are also traded on regulated exchanges.