I believe you are familiar with the term Stock Exchange, like LSE (London Stock Exchange) or NYSE (New York Stock Exchange), so basically stock exchange are companies that allow stock market to work as smooth and efficiently as it is known.
Stock Exchange lists thousands and thousands of companies, and they list the bid/ask prices of stocks/shares of these publicly listed companies and also enables a quick electronic transfer of shares between people or companies on the time when purchase is made.
Largest penny Stock Exchanges markets in the world are:
– New York Stock Exchange – Headquarter in New York City
– Tokyo Stock Exchange – Headquarter in Tokyo
– London Stock Exchange – Headquarter in London
– Shanghai Stock Exchange – Headquarter in Shanghai
– Hong Kong Stock Exchange – Headquarter in Hong Kong
– Toronto Stock Exchange – Headquarter in Toronto
– BM&FBovespa – Headquarter in Sao Paulo
and so on the list continues.
Please note that in order to buy/sell shares/stocks the company have to be listed as PLC (Public Listed Company), and in order to be listed as PLC a company have to go through strict financial requirements.
Stock Market Brokerages
Stock market brokers are the middle men between the stock exchange and the stock buyer in this case people interested to invest in stocks. A lot of people have their brokers, and the broker is responsible to make more money for the client and give back dividends every year or invest more on the market through the broker. Please note that it is a legal requirement to open a brokerage account in order to buy or sell stocks/shares.
Stock Market Traders
Stock Market Traders are people like me or you, who sit on their PC and read online articles about which company is going to skyrocket on sales because of any product they are working and will be releasing on the market soon, and therefore we make decisions to purchase stocks/shares of that company. We have to note that there are not only individuals who trade on daily basis but also multi million dollar investment funds raised for such a purpose only for trading on stock market.
Without people like us who trade on daily basis the Stock Market would not work as it is known.
Stock Market Index’s
I believe you are familiar or already heard of Dow Jones 30, FTSE 100 or S&P 500. These numbers behind are just indicators.
For example if we take S&P 500, it measures only the top 500 companies in US, and if people start selling their stocks on any company which is listed in S&P 500 than the S&P 500 Index Stock Price will drop or the opposite. There are a lot of people who trade on Indexes since it is less risk taking because an Stock Market Index can not fall to rapid on opening hours.
Example of Understanding Stock Market
Stock Market Diagram
The components mentioned above in diagram are main things that Stock Market is based.
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This will help you understand better the Trading Platform before you decide to make you first investment on Stock market.
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