What Is Stock Market And Its Working Process?


The stock market has been an attractive investment platform for retail participants as every individual looks for greater opportunities to employ their funds. It is the platform that facilitates enterprises and different types of investors in the primary and secondary markets. Companies issue their shares in the primary market via IPOs (Initial Public Offerings) and get listed on public stock exchanges. Individuals can trade listed shares in the secondary market through stock exchanges. 

Stock markets deal with securities in dematerialized form only. Stock markets operate online through stock exchanges, like the Bombay Stock Exchange (BSE), National Stock Exchange (NSE), and others where investors can buy or sell securities. Stock markets complete the trading process with the help of stock exchanges and clearinghouses. Stock exchanges have clearing houses to process all the trading settlements. 

A stock market is the reflection of an economy as it fluctuates by numerous factors, a change in the interest rate by the central banks, geopolitical issues, profit announcements by corporations, etc. making stock markets volatile. The market responds to each shift that results in huge uncertainties and risks. 

Decades back, stock markets adopted the online trading system, and stock exchanges operate online. Individuals need not go through the hassles of the ground-based open outcry offline trading system like forgery, delays, etc. 

Individuals interested in stock market investments can go through the post to know integral components of the market, its working system, and the online trading process.

Read also: What Is The Procedure To Convert Shares To Demat Account


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