STOCK MARKET

ABSTRACTION:

Stock represents a share of ownership in a financial institution, while share is a unit which focuses on the share of profit and losses of that particular company. The whole idea of stock market is to deal with shares of a company by buying them. It is any other business where there are profits as well as losses. When a person wants to buy a particular share of a company, he must know what amount to buy and when he must sell them so that he wouldn’t be in possession of it when the share crashes. This is the whole idea of stock market. Different types of stocks are present. They are common stock and preferred stock.



INTRODUCTION:

Common stock is widely seen and often purchased buy the common man. It represents ownership in a company and a claim on a portion of profits. Common stocks, in the long run yield higher returns when compared to the other investments. And it is worth the price since it is very risky as well.
Preferred stock represents some degree of ownership in the company but it does not come with the voting right. This is not at all a risky affair since no matter what, the investors are guaranteed a fixed dividend which is forever. Although it is an added advantage, it does not yield the profit that a common stock does; infact investors of a preferred stock consider it as a debt than equity.
The stocks are mostly traded through exchange. Bombay stock exchange (BSE) and National stock exchange (NSE) are the best examples of trading exchange. It mainly constitutes of places where the sellers and the buyers meet and decide on the price of a particular stock. It’s a business where each second counts since a share which carries a high price can go low in the next minute. Hence the traders and investors are on their toes and do not waste a single minute. The other type of exchange is virtual wherein trading is done through a network of computers where trading is done electronically.This is convenient since the investors need not go to the exchange but can sit at one place and see the updates through the internet.
The purpose of a stock market is to facilitate the exchange of securities and at the same time reducing the risks of investing. It is important for us to distinguish between primary market and secondary market. In primary market, securities are created while in secondary market, investors trade previously issued securities without getting the company involved.


CONCLUSION:

Companies come to the stock market in a variety of different ways and for a variety of reasons. Stock market is a great way to make money but if a person ventures into it only for the sake of money, it is not advisable. That will help you in the long run. Finally to sum it up, stock market is any other business where there are profits as well as losses, so do not think only on the profit front.