Brief Overview of Stock Market

Quick look at the subject of, stock and the stock market

¨A stock is a financial instrument that represents an ownership position in a share ,Stock, bond, or option. A stock or share is a negotiable financial instrument that represents some type of financial value. ¨Equity represent ownership interest held by shareholders in a corporation, such as a stock.

The Stock Market provides a market place for purchase and sale of securities and thereby ensures transferability of securities, which is the basis for the joint stock enterprise system. The existence of the Stock Market makes it possible to satisfy simultaneously the needs of the enterprises for capital and the need of investors for liquidity.

in simple term we ca say that

A stock market is an institution where humans and computers buy and sell shares of companies.

The market in which shares of publicly held companies are issued and traded either through exchanges or over-the-counter markets. Also known as the equity market, the stock market is one of the most vital components of a free-market economy, as it provides companies with access to capital in exchange for giving investors a slice of ownership in the company. The stock market makes it possible to grow small initial sums of money into large ones, and to become wealthy without taking the risk of starting a business or making the sacrifices that often accompany a high-paying career
Takeaways
Stock Market –

¨Is a link between investment & savings

¨ Mobilizes & channelizes savings

¨ Provides Liquidity to investors

¨ Is a market place for purchase and sale of securities

Stocks can be categorized in various ways. One common way is by the country where the company is domiciled. For example, Nestlé and Novartis are domiciled in Switzerland, so they may be considered as part of the Swiss stock market, although their stock may also be traded at exchanges in other countries.

The stock market can be split into two main sections: the primary market and the secondary market. The primary market is where new issues are first sold through initial public offerings. Institutional investors typically purchase most of these shares from investment banks. All subsequent trading goes on in the secondary market where participants include both institutional and individual investors.