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Stock exchange Market
A Stock Exchange is an organized market for buying and selling financial instruments known as securities, which include stocks, bonds, options, and futures. Most stock exchanges have specific locations where the trades are completed. For the stock of a company to be traded at these exchanges, it must be listed, and to be listed, the company must satisfy certain requirements. But not all stocks are bought and sold at a specific site. Such stocks are referred to as unlisted. Many of these stocks are traded over the counter —that is, by telephone or by computer.
Here are some details of stock market and exchange .
Industrial securities market can be broadly divided into two parts, i.e., namely, primary markets or new issues market (NIM) and secondary markets or stock markets. Thus the primary market or NIM deals with new securities, i.e., with those securities which were not available earlier and are made available before the investing public for the first time.
On the other hand, the stock market is a potential market for those old securities which are already issued and also granted stock exchange quotation. Thus the stock exchanges usually provide a systematic regular and continuous market for both buying and selling of old securities.
The main differences between NIM and stock exchanges are mostly related to:
(a) Types of securities dealt,
(b) Nature of financing and
By the term stock exchange, we mean a market where stocks, shares and other kind of securities are bought and sold. In this market owners can dispose of their securities as per their likings. The present large scale production system favours formation of joint stock company or corporate form of organisation which is quite suitable for securing large amounts of capital from those people who possess surplus funds and are willing to take risk and invest them profitably as per their own convenience and temperament.
The buyer of stocks and securities can realise their invested capital by selling those stocks and shares to others ready to buy the same at the prevailing price in the stock exchanges. Thus the stock exchange or market is a designated place where shares, stocks and other securities arc bought and sold. Stock market or exchange is, therefore, an important institution for running the corporate type of firm in a smooth manner.