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By Author: MoneyMaker Financial Services
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“A Stock market or equity market is a public article for the trading of company Stock (Share) derivatives at an decided price; these are securities listed on a stock exchange as well as those only traded confidentially”. The size of the world stock market was estimated at about $36.6 trillion at the start of October 2008.The total world derivatives market was estimated at about $791 trillion face on supposed value. The value of the derivatives market, because it is started in terms of notional value, cannot be directly compared To a Stock or fixed income Security, which traditionally refers to an actual value? Moreover, the vast majority of derivatives cancel each other out. Many such relatively liquid securities are valued as marked to model, rather than an actual market price now we are talk about trading –Participants in the Stock market range for small individual Stock investor to large hedge funds traders, who can be based anywhere. Their orders usually end up with a professional at a stock exchange, who executes order of buying or selling. Some exchange are physical are physical location where transaction are carried ...
... out on a trading floor, by a method knows as open outcry. This type of auction is used in stock exchanges and commodity Exchange where traders may enter “verbal” bids and offers simultaneously. The other type of Stock Exchange is a virtual kind, composed of a network of computer where trades are made electrically via traders. Actual trades are based on an auction market model where a potential buyer bids a specific price for A Stock & a potential seller ask a specific price for the stock. When the bid and ask prices match, a sale takes place , on a first –come –first- served basis if there are multiple bidders or askers a given price. Margin trading: Margin means borrowing money from your broker to buy stock. Now the question is why you would borrow investors generally go for trading on margin so to increase their purchasing power so that they can own more stock without fully paying it. That means you will pay a part of the Buy price and the broker will lend you the difference. A stock is small shares that represent a partial ownership of a company .Stocks are issued by companies In order to raise capital and are bought by investors in order to acquire a portion of the company . Even a Small share of the company will give the investors the right to have say in how the company is run. Although they gain a portion of the company’s profits, investors do not carry do not carry an obligation to the company in case of defaults or lawsuits. Investors buy stocks with the belief that the company will grow continuously to raise the value of their Shares. Acquiring stocks from a new company is considered to be more risky than buying shares from a Well-established company but the potential gain is much greater.