Tuesday, April 07, 2020

What Is a Stock Exchange



Hello friends I just came back with another useful and informative topic and today we are going to talk about stock exchange. I will try to keep it simple as this blog is especially for beginners. We look at all sides of the stock exchange market. How people invest and profit from the stock market, shares are exchanged and traded in many stock markets around the world. The liquidity they bring is an important part of economic development. However, we rarely stop and think about the important role that the stock exchange plays. I have listed some of the main things that are facilitated by the stock exchange so that you can continue on this topic without wasting time.

What is a stock exchange?


The stock market means that shares, debentures, mutual funds, derivatives and other securities are bought and sold. Shares are bought and sold mainly through the stock exchange and in India, the BSE (Bombay Stock Exchange) and the NSE (National Stock Exchange) are the two major stock exchanges.




What is a share?


A share is a unit of ownership that represents an equal proportion of the company's capital. When you buy shares of a company, you become a shareholder of the company. For example, if a company issues 1 lakh shares and you buy 10 thousand shares from it, you become a 10% shareholder of that company. You can sell these shares on the stock market whenever you want.

Here's how it works


First, companies bring in IPOs (initial public offerings) by listing their shares on stock exchanges and issuing shares through IPOs. Upon completion of an IPO, a shareholder will be assigned to auction for shares. Subsequently, these come to the stock market and are bought and sold by investors through stock exchanges and brokers.

How to set a stock price:


When a company issues an IPO, it determines the share price, but after the IPO is completed, the company has no role in determining the value of the shares and the value of the shares is independent of that company. Demand and supply depend on how the company grows over a period of time.

If the number of shares sold is less than the number of shares purchased, the price of the shares will increase and if the number of shares purchased is less than the number of shares sold, the share price will decrease.

Once registered in the stock market, companies must share all important information with investors from time to time, and based on this information, investors value companies. Based on this valuation, the decrease in demand and the supply of shares changes the value of the shares in both directions.




How to buy stock


When you decide to invest in the stock market, take these rules into account, and the next step is to open a trading and demat account with a stock broker.

Demand Account



When we open a bank account, all the money earned through a monthly salary or other means is transferred to a registered bank account. Similarly, all securities such as shares, bonds, government securities and mutual funds are stored electronically in your demat account.

So how do we cover the other important aspects of stock exchange and if you want to download Pakistani Stock Exchange App, you can download from link. .


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