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What is a Stock Market?

Stock market is a medium through which buyers and sellers transact their shares. It is also called as stock exchange where exchange of shares takes place between buyers and sellers. The previous form of securities exchange are physical in nature where as it almost turned now to virtual form which is nothing but online trading. The buyers and sellers place their bids in the online terminal through which they will be executed timely at desired prices. There is a common question in every freshers mind, what will be the investment required to enter into the stock market. Well, though the answer is very simple, its description is vast in nature. There is no minimum investment rule that can be started with. It is open to everyone, from individual rupee investor to institutions and hedge fund traders.

There is a common disbelief that share market is a place where excess shares are stored and deliver to buyers when they place their bids for purchase. It is very important to note that a transaction takes place only between buyer and seller. If the bid placed by the buyer and ask placed by the seller are not matched, transaction does not takes place. Coming to industries point of view, stock market is a very important source to raise funds. Without this, it would have never been so easy for the economy to grow as fast as the present day’s one. More importantly, funds invested in stock market by FIIs reflects the present and upcoming growth of respective country’s economy. Thousands of crores are flowed directly to markets instead of banking deposits as investors find this as a good and high return sector comparatively.

History of market seems to have no particular date of birth as trading was done in one or the other form for many centuries. Around 12th – 13th centuries, bankers used to trade in government securities which has given rise to this form of transactions. There are also certain group of people to argue that share markets existed in ancient period too. In the mid 18th centuries, more particularly in the start of 19th century, complete shape was brought to stock market by western stock exchanges which was later adapted by almost all the countries in the world.

Summary of the article:

Stock market is a place to buy and sell shares
Shares are bought or sold through stock exchanges
Companies are required to register/list through SEBI
share market is a way to raise funds for industries
Market is a way to earn by investing in stocks.

Posted By: Gaurav Pandey                 Posted on: 2016-02-05 16:36:13                 Updated on: 2016-02-06 12:40:12