Definition of Stock market

Definition of Stock market

Stock market also known as share market is one point, platform or hub where buyers and sellers of shares deal. It is a place where aggregated buyers and sellers do their share business transactions.

Stock market facilitates brokers to trade company shares and other securities.

  • Stock market list common shares as well as bonds like corporate and convertible ones.
  • Almost all big companies have their shares listed in stock exchange.
  • Listing in stock exchange makes stocks more marketable and liquid. This attracts more investors.
  • Individuals as well as companies, banks, financial institutions and insurance companies participate in stock market functions.
  • Stock market runs on real time.

Brief Explanation of Stock market

The market can be divided into two main sections:

Primary Market and Secondary Market

Primary Market: This is one where new shares are sold.

Secondary Market: Once the stock has been sold in the primary market it is then traded in secondary market between buyers and sellers at prevailing price.

  • Most of the countries have their own stock exchange market.
  • Stock exchange is said to be crashed when the market or business is very low.
  • These days’ stocks are dealt in electronic form.
  • The biggest Stock exchange in USA and the world is New York Stock Exchange (NYSE).
  • It is the most powerful stock exchange in the world.
  • The number of stocks each exchange handles in a day is called it’s volume.
  • Stock brokers, investment banks, traders, portfolio managers and analysts are the main players of the stock market.
  • Two types of securities that are floated in the stock market are listed securities and over the counter shares.



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