The stock market or equity market is a public entity for trading in company shares (shares) and derivatives at an agreed price. Shares listed and traded on a stock exchange which is an entity of a company or mutual organization specifically in the business of bringing buyers and sellers of the organization to the list of shares and joint securities. Participants in the stock market include individual retail investors, institutional investors such as mutual funds, banks, insurance companies and hedge funds, and also public companies that trade their own shares. Their orders usually end with a professional on the stock market, who executes a buying or selling order.
The purpose of stock exchange is to facilitate the exchange of securities between buyers and sellers, thus providing a (virtual or real) market. Exchanges provide real-time trading information on registered securities, facilitating price discovery. Some exchanges are physical locations where transactions are carried out on the trading floor, with a method known as open protest. This type of auction is used on stock exchanges and commodity exchanges where traders can enter offers and verbal offers simultaneously. Another type of stock exchange is a virtual type, consisting of computer networks where trading is carried out electronically through traders. Actual trading is based on the auction market model where potential buyers bid a certain price for a stock and potential sellers ask for a certain price for the stock. When the supply and demand prices match, a sale occurs, based on who comes first to be served first if there are several bidders or askers at a certain price.
A few decades ago, worldwide, buyers and sellers were individual investors, like wealthy entrepreneurs, usually with a long family history for certain companies. Over time, institutions such as pension funds, insurance companies, and mutual funds …Read more