The London Stock Exchange Trade in stock markets means the transfer in exchange for money of a stock or security from a seller to a buyer. This requires these two parties to agree on a price. Equities stocks or shares confer an ownership interest in a particular company.
For instance, people drive to city outskirts and farmlands to purchase Christmas trees, visit the local timber market to purchase wood and other necessary material for home furniture, and go to stores like Walmart for their regular grocery supplies.
Such dedicated markets serve as a platform where numerous buyers and sellers meet, interact and transact. Since the number of market participants is huge, one is assured of fair price.
If the number of tree sellers is large in a common marketplace, they will have to compete against each other to attract buyers. The buyers will be spoilt for choice with low- or optimum-pricing making it a fair market with price transparency.
Even while shopping online, buyers compare prices offered by different sellers on the same shopping portal or across different portals to get the best deals, forcing the various online sellers to offer the best price. A stock market is a similar designated market for trading various kinds of securities in a controlled, secure and managed environment.
Since the stock market brings together hundreds of thousands of market participants who wish to buy and sell shares, it ensures fair pricing practices and transparency in transactions.
While earlier stock markets used to issue and deal in paper-based physical share certificates, the modern day computer-aided stock markets operate electronically. How the Stock Market Works In a nutshell, stock markets provide a secure and regulated environment where market participants can transact in shares and other eligible financial instruments with confidence with zero- to low-operational risk.
Operating under the defined rules as stated by the regulator, the stock markets act as primary markets and as secondary markets. As a primary market, the stock market allow companies to issue and sell their shares to the common public for the first time through the process of initial public offerings IPO.
This activity helps companies raise the necessary capital from investors. To facilitate this process, a company needs a marketplace where these shares can be sold. This marketplace is provided by the stock market.
Investors will get the company shares which they can expect to hold for their preferred duration, in anticipation of rise in share price and any potential income in the form of dividend payments. The stock exchange acts as a facilitator for this capital raising process and receives a fee for its services from the company and its financial partners.
Following the first-time share issuance IPO exercise called the listing process, the stock exchange also serves as the trading platform that facilitates regular buying and selling of the listed shares. This constitutes the secondary market. The stock exchange earns a fee for every trade that occurs on its platform during the secondary market activity.
The stock exchange shoulders the responsibility of ensuring price transparencyliquidityprice discovery and fair dealings in such trading activities.
As almost all major stock market across the globe now operate electronically, the exchange maintains trading systems that efficiently manage the buy and sell orders from various market participants.
They perform the price matching function to facilitate trade execution at price fair to both buyers and sellers. A listed company may also offer new, additional shares through other offerings at a later stage, like through rights issue or through follow-on offers. The stock exchange facilitates such transactions.
The stock exchanges also maintain all company news, announcements, and financial reporting, which can be usually accessed on their official websites.Nov 15, · Stock market trading in Asia was mixed on Friday. In China, Hong Kong's Hang Seng index is little changed at 26,, while the Shanghai Composite is .
Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Complete stock market coverage with breaking news, analysis, stock quotes, before & after hours market data, research and earnings.
Stay on top of the changing U.S. and global markets with our market summary page. Dive deeper with our rich data, rate tables and tools. What is the 'Stock Market' The stock market refers to the collection of markets and exchanges where the regular activities of buying, selling and issuance of shares of publicly held companies take.
The Nasdaq Stock Market website features stock market news, stock information & qoute updates, data analysis reports, as well as a general overview of the market landscape.