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What Is Stock Exchange and Its Features?
A stock exchange or stock market is a middle the place traders purchase and sell shares of companies. Corporations need to get their stock listed on the stock exchange. A big company usually has its stock listed on many exchanges across the world.
Now the purpose comes that what are the shares: Shares are a small part of a company, when somebody buys shares in an organization it means purchaser owns a small piece of that particular company. Price of shares primarily based on many different things. The main thing that affects the value of shares is the balance sheet between demand and supply. Let us know how it affects, if so many traders want to buy a stock then the worth of that share goes high and if there is more sellers than the worth of that share goes down.
Stock Market Functions
• Pricing of Securities: Stock market provides the platform to get the values of the securities on the basis of provide and demand factors. The securities are valued higher as there may be more demand, by way of this way the worth of securities is decided, more demand the more value of securities. Investors can know the value of their investments, thus; valuation of securities is very useful.
• Safety of Transactions: Every stock exchange is organized market and has its own law. Each member has to comply with the rules similarly firms also must comply with the strict guidelines and regulations. This will ensure the safety of selling and shopping for via the stock exchange.
• Contributes to Financial Growth: Many company's securities are bought and sold in stock exchange, investors can buy securities to get benefit and may sell in case of need of money. These processes of funding encourage the investors to speculate their cash in industries, thus economic development turns into possible.
• Spreading of Equity Cult: The stock exchange plays an essential role to encourage the investors to put money into ownership securities. Stock change guides the traders by giving them financial updates typically this information is printed, by giving knowledge about funding and giving higher trading practices and far more.
• Providing Scope for Speculation: When traders purchase shares to get a profit consequently the adjustments in market price of that shares called speculation. Some scope of hypothesis have to be allowed with a view to provide liquidity to securities, share market provides this facility.
• Liquidity: The main operate of the stock market is to provide a platform for buying and selling shares and through these buyers get assurance that they can convert their funding into money each time they want. So, buyers invest in long run investment without any hesitation because they can convert it into short term and medium time period at any time when they want.
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