How Does the Stock Market Function?
Stock market functions either through share trading on stock exchange floor or electronically. You instruct your stockbroker to purchase or sell shares of particular company. He then informs floor clerk of stock exchange, who finds a suitable buyer. After completing deal, stockbroker gets back to you with final price of your investments. Mutual funds and other institutional investors prefer electronic exchange for stock buying and stock selling. Such online investing enables closer contact with share trading although you need services of stockbroker, who offers valuable investing advice and investment tips. Useful Terminology Global stock market provides details of different stocks across the world. Stock options allow free buying and selling of investments at agreed prices within certain period. Stock index futures are investors contract to invest or sell investments at agreed prices over a decided period. Short selling and margin buying are traders tactics to make money in short peri
The stock market is a market where people buy and sell parts of companies. The parts being bought and sold are a financial interest in the company called stocks. The companies involved must be publicly held companies, which means that they have to be companies that sell stocks to public investors on an open market. Companies that sell stocks to investors usually do so in order to raise capital. The capital is then used for things such as financing current operations and paying for expansion plans. If the company is able to turn the capital into profits, a share of the profits is passed on to investors. Similarly, if the company loses money, investors share the loss. The stock market is simply a central place where people come together to buy and sell stocks. However, the stock market is not a store or a single building. It doesn’t really have a physical location. However, when people think of the stock market they typically think of Wall Street or the New York Stock Exchange, also know
