About Stock Market

Stock market is a kind of economic network that facilitates economic transactions for the trading of company stocks as well as derivatives at an agreed price. Now it is the most important resource for the companies to raise their capital significantly. Stock market has the history of its own. In the 12th century, the concept of the stock market came to the people of French at first. In the beginning of the 14th century the bankers of Verona, Pisa, Florence and Genoa began the business of trading in government securities. Dutch East India Company was the pioneer of the stock market.It was the first company in the world who issued the first stocks and bonds on Amsterdam Stock Exchange.

Generally, the stocks are listed and traded within the stock exchanges. Stock exchange is the entities of mutual organization that are specialized in the trade of bringing the buyers and sellers of the organizations to the listed securities and stocks together. There are two types of stock exchanges around the world. First one is the ‘open outcry’ where the traders have to enter in a verbal bid and offer simultaneously. Second one is the ‘virtual exchange’ where the traders are electronically getting connected to a computer network. Traders mainly work with auction market model where a buyer has to bid an exact price for a stock. If the price matches with the seller’s price only then the stock can be sold. In the case of multiple buyers the stock can be sold on the basis of first come first served. The main function of a stock exchange is to support the exchange of securities among the buyers and sellers of a stock market.

The participants of the stock market can be range from a small investor to a giant hedge fund trader. There is no problem to join any stock market from any corner of the world. Few decades ago the situation was not like this. Then the buyers and sellers worked as the individual investors of some particular corporations. With the passage of time the stock market becomes institutionalized and the buyers and sellers become more organized. These organized investors have made some important changes in the operation of the stock market. Though the corporate supremacy adversely affected by the organized investors, it has made the business smoother than before.

stock market not only expands the business but also accelerate the global finance significantly. This will be further enhanced with passage of time.

By: Steve Nugent

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