What is the Stock Market and its functions?

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A stock exchange or stock market is a hub where traders buy and sell shares of companies. Companies want their shares to be publicly traded. A large company usually has its shares listed on many exchanges around the world.

Now comes the question of what shares are: shares are a small part of a company, when someone buys shares in a company, it means that the buyer owns a small part of that particular company. Stock price based on many different things. The main thing that affects the price of the shares is the balance between supply and demand. Let us know how it affects, if so many traders want to buy a share then the price of that share goes up and if there are more sellers than the price of that share goes down.

Stock market functions

• Securities pricing: The securities market provides the platform to obtain the values ​​of securities based on supply and demand factors. The securities are valued more as there is more demand, in this way the price of the securities is determined, the more demand the more value of the securities. Investors can know the value of their investments as well; Valuation of values ​​is very useful.

• Security of transactions: Each stock exchange is an organized market and has its own law. Each member has to follow the rules similarly, companies must also follow the strict rules and regulations. This will ensure the security of selling and buying through the stock exchange.

• Contributes to economic growth: the securities of many companies are bought and sold on the stock market, investors can buy securities for profit and sell them when they need money. These investment processes encourage investors to invest their money in industries, whereby economic development becomes possible.

• Spreading the cult of equity: the stock market plays an essential role in encouraging investors to invest in property titles. Stock Market guides investors by providing general economic updates, this information is published, providing investment knowledge and providing best business practices and much more.

• Provide scope for speculation: When investors buy stocks for profit, as a result, changes in the market price of those stocks are called speculation. A certain scope of speculation must be allowed to provide liquidity to the securities, the stock market provides this facility.

• Liquidity: The main function of the stock market is to provide a platform for the purchase and sale of shares and, through these, investors obtain the assurance that they can convert their investment into cash whenever they want. So investors invest in long-term investments without hesitation because they can convert to short and medium term whenever they want.