STOCK EXCHANGE

About Stock Exchange:

A Stock Exchange is basically a corporation or an organization, which renders facilities for the traders and the Stockbrokers, so as to facilitate trading of company stocks and securities. Facilities with regards issuance and redemption of securities are also provided by Stock Exchanges. The payment of income, dividends, and other financial instruments and capital events, shares issued by the companies, unit trusts, bonds and other investment pools are the securities traded on a stock exchange. It is essential for a security to be listed, in order that the security is traded on the specific stock Exchange. Normally, central locations are earmarked for recordkeeping. Since modern markets are mostly electronic networks, trades linked to physical places are decreasing. Also, electronic networks provide speed advantage and costs of transactions. Only members can trade on Stock Exchanges.

Miscellaneous:

Through definitions in the primary market and its subsequent trading in the secondary market, initial stocks and bonds can be offered to the investors. Stock Exchanges are the most important components of the Stock Market. The demand and the supply in the Stock Exchanges are mostly driven by various factors, just as in the free markets thereby affecting the prices of stocks. There no compulsions with regards issuance of stocks via the stock exchange. However, these stocks cannot be traded on the Exchange. Such form of trading is known as off Exchange. These are the normal methods through which trading of bonds occur. Stock Exchanges have become a part of the global market for securities.

Stock Exchange – Requirements: