STOCK MARKET SYSTEM Top five largest stock exchanges ( on the basis of market capitalisation ) of the world in their decreasing order are – the NewYork Stock Exchange, the NASDAQ, the Tokyo Stock Exchange, the London Stock Exchange and Bombay Stock Exchange. Trading in stock exchanges takes place via the mediators known as the brokers, the jobbers, the market-maker.

World’s first stock exchange was established in Antwerp, Belgium ( then part of the Netherlands ) in 1631, the London stock Exchange opened in 1773 and then Philadelphia Stock exchange ( the first in the New World) opened in 1790. The first stock exchange in India, the Bombay Stock Exchange.opened in 1790. The first stock exchange in India, the Bombay Stock Exchange.

A share being directly purchased by anybody from the issuer which may be the company itself. The person is known as the primary share holder. The market where the instruments of security market are traded among the primary instrument holders is known as the secondary market. Such transactions need an institutionalised floor for their trading which is made available by stock exchanges.

Bear and Bull- A person who speculates share prices to fall in future and so sells his shares and earn profits is a bear. He earns profit out of a falling market. Basically, he is short selling the shares.

Opposite to bear, bull is a person who speculates share prices to go up in future so either shop selling the select group of shares for that time to be reached. ( he is basically taking long position on those shares)

Thus, a bear increases the number of shares in a stock market activating a general fall in the index- a bearish market. Opposite to it, a bull creates a scarcity of shares in the stock market activating a general rise in the share prices and the index – a bullish market.

SME Exchange is a stock exchange dedicated for trading the shares of small and medium scale enterprises ( SMEs ) who, otherwise, find it difficult to get listed in the main exchanges.

The concepts originated from the difficulties faced by SMEs in gaining visibility or attracting sufficient trading volumes when listed along with other stocks in the main exchanges.

Broker is a registered member of a stock exchange who buys or sells shares / securities on his client’s behalf and charges a commission on the gross value of the deal-such brockers are also known as commission brokers.

Brokers who offer services such as investment advice, clients’ portfolio planning, credit when a client is buying on margin other than their traditional commission job are known as full service brokers.

Jobber is a broker’s broker or one who specialises in specific securities catering to the need of other brokers. In London Stock Exchange he is called a market-maker while in the New York Stock Exchange he is called a Specialist.

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