Stock Market Overview
We all are quite familiar with the term stock market but what does the term mean? Stock
exchanges are a reference to a kind of market where different
companies both big and small are registered. Stocks are a means for a company to raise money, the position of a
company in the stock market or exchanges are an index for the investors
about the security of their investment as well as the stability of the company.
Investing in the stock market is a good option for
someone who wants immediate and good returns on his money. But this will be possible only if you are familiar
with the ups and downs of the stock market and invest wisely. While a stock market can make you a millionaire
overnight in case of the right choices it can also drain your fortunes in case of a wrong investment. Trading in
the stock market can be of two types day trading and long term investing.
You might trade in stocks through the Internet too.
If you wish to invest on a stock
market you would require consulting an investment advisor or a share broker who is knowledgeable about
the share markets and would help you derive profits for your investments. It would be better to talk to several
advisors before you decide on the one you would take advice from. While choosing an investment advisor evaluate
his experience, professional background, education and area of expertise.
The stock market is one of the most vital places which provide the companies
with resources for making profits fast. This makes the companies to go public and make a lot of money required
for the expansion of their business. When you want to invest in a particular company in the stock market you
have to observe the company financial history. If you are a beginner in this field, you should invest your money
in bits and in only such companies that have a stable financial track record.
For sound and long term investment you could choose companies
that deal in oil or gold sectors or any such sector that is not dependent on temporary demands. For those who
want to make a quick buck invest in companies that are on the rise. Investing in stock markets is risky business
so be sure how and where you put your money. Do a thorough research on the companies that show promise and keep
track of what your broker advises you.
The stock exchanges list and trade the stocks that are entities
of some mutual organization or a corporation who have the expertise in bringing sellers and buyers to the
listings of securities. The stock market of the United States deals with the securities that get listed on the NASDAQ, NYSE Euronext and Amex. The European stock
exchanges include Deutsche Borse and London Stock Exchange.
Contributors of a stock
market include both small investors and large corporations and traders. They can be based anywhere in the
world. But there are some stock exchanges which allow the participants to carry out open trading which is known
as open outcry. Here commodities are exchanged and the traders bid on verbally. But nowadays the stock exchanges
have gone virtual with a network of computers are used to trade electronically.
The actual structure of the stock market is based on an auction market
where the buyer bids a certain price and the seller asks for a certain price of their stock. If the bid matches the
price of the buyer and the seller then a sale is done. The stock exchanges provide information on the securities
listed helping in fixing a price.