A stock market is a place where investors can buy and sell financial instruments like stocks, bonds, etc. Many intermediaries in the stock market facilitate trade like stock exchanges, depository participants, custodians, brokers, banks, etc.
A stock exchange is a platform that allows investors to trade securities at the market price. There are two major stock exchanges in India – the National Stock Exchange or NSE and the Bombay Stock Exchange or BSE.
A stock exchange performs the following functions:
• It determines the market price of securities based on their demand and supply.
• You can only trade in stocks that are listed on a stock exchange. The listing happens after the exchange verifies various aspects of the company. This helps make dealing in stocks secure.
• It regulates new share issues, initiates better trading practices, and spreads awareness about stock investing among people.
• It provides a ready market for buying or selling securities. This assures investors that they can convert their shares into cash whenever they want.
• Stock exchanges allow healthy speculation to ensure liquidity and offer opportunities to investors to benefit from fluctuating stock prices.
• A stock exchange is an indicator of the economic conditions of a country.
• It ensures that listed companies submit their balance sheet and annual report to control the trading environment and protect the investors.
A stock exchange is a platform that allows investors to trade securities at the market price. There are two major stock exchanges in India – the National Stock Exchange or NSE and the Bombay Stock Exchange or BSE.
A stock exchange performs the following functions:
• It determines the market price of securities based on their demand and supply.
• You can only trade in stocks that are listed on a stock exchange. The listing happens after the exchange verifies various aspects of the company. This helps make dealing in stocks secure.
• It regulates new share issues, initiates better trading practices, and spreads awareness about stock investing among people.
• It provides a ready market for buying or selling securities. This assures investors that they can convert their shares into cash whenever they want.
• Stock exchanges allow healthy speculation to ensure liquidity and offer opportunities to investors to benefit from fluctuating stock prices.
• A stock exchange is an indicator of the economic conditions of a country.
• It ensures that listed companies submit their balance sheet and annual report to control the trading environment and protect the investors.
