The stock exchange is also known as the security exchange. That is the facility where traders and stockbrokers can sell and buy their securities. For example, you may see the share of stock and other financial instruments. This trade on the exchange is restricted to the members who are brokers.
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A little description of the process
When the new security is sold in the primary market, they are traded on the secondary market by the rule. There the one investor buys shares from another investor. They buy the claim at the market price, which is prevailing. They believe and sell their shares when one buyer agrees with another buyer. By the regulatory authority, the secondary market stock exchanges are regulated. But in India, the regulation governs for the secondary and primary market by the India exchange board. We already know that the stock exchange is one kind of facility for stockbrokers. The stockbrokers mainly are company stocks and other different types of securities.
Functions f stock exchange
Some vital function that makes stock exchange perfect;
Economic barometer
The stock exchange is the economic barometer because this indicates the state’s economy. All kinds of major and minor changes keep the record in the stock exchange in the share price. The right pulse of the economy is reflected edit.
Valuation of security
Based on the supply and demand stock market helps in the security to maintain the valuation. The profitable and growth-oriented security offer organize by a different company. It is helpful to perform in the respective function for the investor, creditors, and the government.
Transactional safety
The safety of transactions ensures security. And the security is done by the exchange list. The listed company has to maintain all the rules and regulations according to the authority regulations.
Contribution
For trading, stock exchanges offer platforms for the securities of different companies. In the process, reinvestment and disinvestment are involved. This gives opportunities for capital formation, and this is helpful for the growth of the economy.
Quality investment and public aware
The stock exchange is very much informative. You will know about the equity market for investing. This encourages people to invest in securities.
Scope of speculation
You will get the offer of permitting healthy speculation on trade security. And the protection is based on the demand and supply f liquidity.
Liquidity facilities
The most potent and essential stock exchange role is a ready platform for buying and selling securities. Your exciting investment some time converted into a significant amount of cash. You will get lots of offers in liquidity terms. The investor receives confidence in it to perform by their investment.
Capital allocation
The stock market helps to get better allocations of capital. And the better side is only for the listed investor. You will get an active share in the profit-making companies. Some fresh company is also available in the capital from the equity.
Investment and savings
The stock market is one of the vital sources for different types of investors. The investment sometimes offers a greater return. You will get a great option like gold and silver from the stock exchange, which is an encouragement for the investor.
We know that the GAFAM is a renowned tech stock for the famous five in the U.S. in this site, Google, Apple, Face book, Microsoft stock is quite similar. But the GAFAM is unique and different in the industry and the tech sector. Generally, it belongs to the media business. If you are interested in the stock exchange, you can visit the site I mention in the article.
