What is a Stock Market?
The stock market, also known as the equity market, is a platform where publicly traded companies' securities are bought and sold. It allows individuals and institutions to invest in these companies, potentially earning returns through dividends, interest, or capital appreciation.
Key Players in the Stock Market
The stock market is primarily composed of three main players: issuers (companies), intermediaries (broker-dealers and investment banks), and buyers/sellers (investors). Issuers issue stocks, bonds, or other securities to raise capital. Intermediaries facilitate transactions between buyers and sellers. Buyers and sellers can be individual investors, institutional investors, or a combination of both.
Functions of the Stock Market
The primary functions of the stock market are to provide an efficient way for companies to raise capital, for individuals and institutions to invest in these companies, and for buyers and sellers to exchange securities. These functions include listing rules, trading systems, regulatory oversight, and investor protection measures.
