Stock Exchange provide trading platform. Therefore buyers and sellers can meet to transact in securities. Moreover, stock market or equity market is public entity. And stock and derivatives will trade at fixed price. However, check stock exchange of India list. Probably, there are two major stock exchanges in India. Such as Bombay stock exchange (BSE) and National stock exchange (NSE). Hence, also see history of stock exchange.
Stock Exchange introduction
Stock exchange also called stock market or share market. Probably, Stocks are listed and traded on stock exchanges. Moreover, these are securities listed on stock exchange for those who trade privately. Therefore, stock exchange is one important part of capital market.
Stock exchange is an organized market to buy and sale security. And also it is suitable place to do trade securities in systematic manner. But as per certain rules and regulations. Therefore, it perform various function and offers useful services to investors. In addition, it is an investment intermediary and facilitate economic to develop.
However, securities are purchased and sold out as per rules and regulation. And it provides convenient and secured platform for transact in different securities. But for new issues stock exchange creates climate for an active and growing primary market. Moreover, secondary market is active and healthy in existing securities. It leads to positive atmosphere for investors.
What is stock Exchange
Stock exchange is market for purchase and sale of second hand securities. And it provides trading facilities for stock brokers and traders. To trade shares of listed companies and other financial instruments. Such as Term finance Certificates and Derivatives. Hence, see features of stock exchange.
Similarly, Stock exchanges also give services for issue. Such as listing or delisting of securities. And other capital contains income payment and dividends. Because, it is key institution for smooth running. So corporate sector has fixed growth. Probably, stock exchange is home of capital and turn money market.
Probably, it provides proper mobility for capital. Like joint stock companies, government and semi government issued securities are deal with stock exchange. See History of stock exchange. Hence, check overview of Indian Stock Market. Check out fundamental of how India makes it money.
Function of Stock Exchange
Stock exchange is nonstop market for resale of existing securities. And it is center where buyer and sellers pull together. To deal in securities at any time in business hours. But it enables you to realize quickly their shares and debentures. However, this facility encourages people to invest in business activity by means of buying industrial securities.
However, another function of stock exchange is to protect interest of investor. You can ensure safety and fair deal to regular investor. Therefore without cover of stock exchange there may be unfair fight between different brokers. And you may be misled by dishonest brokers. Hence, in stock exchange any misconduct by broker carries severe penalty.
Similarly, another major function of stock exchange is to mobilize excess fund of individual firm. Therefore without stock exchange these funds have remained idle. Because, it direct surplus funds into most profitable channel. And also secures their effective utilization. Therefore it helps new investor to obtain securities at any time at market price.
What is Capital Market
Capital market is market of securities. And company and government raise long term funds. It is market where money invests more than one year. But it contains stock market and bond market. See definition of Debt. Therefore, amount of money borrowed by one party from another.
Moreover, many corporation or individuals use debt to make huge purchase. But who will not afford under normal situation. However, debt gives permission for borrowing party to borrow money. And that will pay back at later date with interest.
Important functions of stock exchange
Continuous market for securities
You are able to invest in good securities and in case of any risk. But it allows switching over one security to another. So stock market provides nonstop opportunities for securities. Hence, you can read functional report of stock exchange method and methodology.
Evaluation of Securities
However, securities price clearly show performance of companies in stock exchange. It adds demand and supply of securities in helpful manner. But it also shows firmness of companies. Therefore you are in better to take stock position and invest as per your necessities.
Therefore public savings is making active through mutual funds, investments trust and other securities. Because, those who cannot give huge amount to invest. But they have chance by mutual funds and investment trusts. Hence, see functional report of stock exchange presentation.
However, stock exchanges support healthy thought and provide opportunity. And you can take high profits from rise and fall in security prices. Therefore price of security is based on supply and demand. Moreover, it creates healthy style in market. Hence, any false lack is barred by rules and regulation of market.
Mobility of funds
Stock exchange permits both investors and companies to sell or buy securities. And it allows ease of access of funds. By this money market strengthen and short term funds are available. Moreover, banks also provide funds to deal in stock exchanges.
Stock exchange protect investors
However, your funds will protect in stock exchange. Therefore, only actual companies are listed and behavior of stock exchange is control. You can also see importance of stock exchange.
Stock exchange helps capital formation
In addition, stock exchange plays an active role for capital formation in country. Probably, companies are able to raise funds either by issuing more shares. But through bonus shares or bonus shares. However, when company wants to go for diversify. So they can issue shares and raise more funds.
Hence, they can make more capital and support economic growth. In addition, stock exchanges also create habit of saving, investing and risk bearing on public investment. Moreover, for better understand methodology of stock exchange
Stock Exchange Liquidity
However, Bank institution can invest their idle funds in stock exchange. And it also earns profit within short period. But if need arises these securities can be sell directly to raise funds. Hence, stock exchanges provide chance to convert securities into cash within short notice. Therefore, view role of stock exchange.
In addition, most important function of stock exchange is to act as economic indicator. Furthermore, government is strong in following and money-making. Therefore government will have upward trend in stock market. Whereas an unstable government will have downward trend in stock market. Hence, every government will take up policies in such manner that stock exchange remains active.
Control on companies
Similarly, one of major function of stock exchange to control companies. Probably, companies securities listed in stock exchange have to submit their annual report. And also audit balance sheet to stock exchange. Hence, only actual companies can function and shares will transact. If not such company’s will be black listed. Because, you will find difficult to raise their capital.
Finally, in earlier days selling will do by physical. However, buyers and seller shout their prices. Therefore check objectives of stock exchange. But now it is done electronically. Moreover, for more details see aims of stock exchange. Probably, buyers and sellers can quote their prices on computer screens. Hence, transaction depends on market price. Check functional report of stock exchange need and importance.