why do we need the stock market
The primary purpose of a stock market is to provide a structured and where investors can safely buy and sell shares of stock in a public corporation and where company owners can acquire equity investment. Company operators can seek new cash from debt, private investment or public investment. Taking a company public and listing shares of stock for trade on the open market enables a massive infusion of equity cash. The process of an initial public offering enables
some of their own shares of stock. The business itself benefits from the capital it raises through the issuance of shares to the public. Businesses and investors benefit from the much more liquid trading environment offered by a public stock market, according to the BusinessDictionary website. High liquidity makes it easier for investors to get in and out of stocks. The liquidity itself often strengthens the value of a stock, simply because a buyer knows he has a large pool of other potential buyers when he chooses to sell.
Because of the relatively high liquidity, companies listing shares to the public typically get much more per-share equity value than they likely would in the private market. Investors can purchase and sell shares at any point that the market is open, as long as they abide by U. S. Securities and Exchange Commission, or SEC, regulations. This open market forum allows for varying strategies, ranging from long-term investments to day-trading activity. A is to protect the interests of investors and the integrity of stock exchanges. Rules on insider trading and trade settlements are among the SEC's oversight areas. The SEC is also in charge of enforcement when companies or investors violate regulations. Stocks is one of the way by which companies raise their capitals by selling their shares on the open markets to raise the significant amounts of capital necessary for large-scale manufacturing and the development of services.
PThe primary role of any stock market is to provide companies with access to large investor pools and to provide liquidity for shareholders. P A stock exchange is a place to trade stocks. P Exchanges may also cover other types of security such as fixed interest securities or indeed derivatives. Stock trading is regulated by SEBI. NSE and BSE executes the stock trading. Brokers registered withP Stock exchanges act as intermediary between NSE BSE and with buyer and seller. Both buyerPand seller Pgains an advantage and/or profit is beneficiary. P The investors who knows when to enter and when to give up in a trading is the one who benefits from trade market. It also provide FDI/FII Pfunds and augurs growth of the industry. As far as the company, they get investments from public to get large amount of capital by giving them shares or equity in behalf. As far as the share holder of a company, he holds the shares of the company.
P He has the right to hold or sell the share for any period of time. P He gains dividends and profit from the shares according to the market rate of the particular share. As far as the NSE, it was mainly a setup to bring in transparency in the markets. Instead of trading membership being confined to a group of brokers, NSE ensured that anyone who are qualified, experienced and meet minimum financial requirements is allowed to trade. As far as the FII, huge amount of the investment is made by them in order to gain from the market, so they play a major and cautious role in the trade market on prevailing circumstances and/or on forecasting. As far as traders, they obviously try to get benefit by their decision making strategies and analysis with the known risks. As far as investors, they are who purchase shares of a company for a long term with the belief that the company has strong future prospects.
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