Facts of the Stock Market that you do not Know
A stock market, or share market, is a group of buyers and sellers of stocks that represent business claims; This includes securities listed on public shares.
The concept behind how the stock market works is very simple. The auction house acts like a chart, helping stock market buyers and sellers negotiate and trade prices.Investors can buy and sell these shares among themselves, and the exchange monitors the supply and demand of each listed stock.
There are two types of stock market:
Primary market.
Secondary market.
Primary Market
The primary market is a segment of the capital market that is issued to investors by the issuer and direct issuer of equity support securities. Investors buy securities that have not been traded before.
The primary market is where bonds are formed. It is in this market that companies sell (float) new shares and bonds to the public for the first time. An initial public offering or IPO is an example of a primary market. … An IPO occurs when a private company issues shares to the public for the first time.
Secondary Market
The secondary market, also known as the aftermarket, follows the general offer, which is the financial market in which previously issued financial instruments such as stocks, securities, options and futures are bought and sold.
The secondary market is where investors buy and sell the securities they already hold. Most people generally refer to this as the “stock market”, although stocks are sold on the primary market when they are first issued.
The secondary market is where investors buy and sell bonds from other investors.
To invest in stocks one must open a demat account and open a trading account with the broker to trade (buy / sell) the shares in exchange using the broker’s site. The investor’s bank account must be linked to the investor’s demat and trading account.
Preferred stock prices are less volatile than common stock prices, meaning stocks are less likely to lose value, but they are less likely to gain value. In general, preferred stock is better for investors who prioritize returns over long-term growth.
Stock Market Terms
The most commonly used stock market terms include bear market, bull market, blue chip stocks, earnings per share, dividends, auctions, ask, spread and close. Other commonly used stock market terms include forex, margin and initial public offering.
