Stock Exchange

What is the stock market?

The stock market is a institution in charge of facilitating negotiations for the purchase and sale of securities, including bonds, corporations, company shares, participation certificates, etc.

Thus, when an organization requires financing, it usually goes to a stock exchange to make a public offer and that all people interested in the company can invest in it.

On occasions, the State also makes use of the stock market to finance public spending and granting bonds and titles to interested savers.

How does the stock market works?

To understand how a stock exchange works, it will be necessary to understand each of the participants in the Stock market, where said bag acts.

The stock exchange functions as a facilitator between the issuer and the investor.

The stock market works as follows:

1. A transmitter, generally a company, issues securities to be traded on the market (the stock market).
2. A regulatory body will supervise the stock market system to avoid fraud and embezzlement.
3. A facilitatorIn this case, the stock exchange will ensure that the transaction between the issuer and the investor is safe, fair, transparent and orderly.
4. Finally, the investor, which is usually a person or a company, invests in securities in the market to obtain a profit in return, such as money or shares.

Functions of the stock exchange

The main functions of the stock market are the following:

• Boost the market of capital in all countries, so that the greatest number of people can obtain real estate or titles through the purchase and sale.
• Do daily sessions for investors to meet with brokers, broker-dealers, and securities holders.
• Promote the internal savings of those investors who need additional resources.
• Thanks to the rules that govern it, offers safe and legal businesses.
• Record the quotes and prices of the activities carried out, so that everyone can access this information.

Characteristics of the stock market

The main characteristics of the stock market are the following:

• Safety: has a series of rules, within the legal framework, so that negotiations are carried out effectively.
• Equity: allows information and negotiation factors to be equal for everyone involved.
• Transparency: all those involved must carry out their decisions according to market conditions.
• Liquidity: it is possible to exchange securities for cash when necessary.