Stock Exchange

A place, whether physical or electronic, where stocks, bonds, and/or derivatives in listed companies are bought and sold. A stock exchange may be a private company, a non-profit, or a publicly-traded company (some exchanges have shares that trade on their own floors). A stock exchange provides a regulated place where brokers and companies may meet in order to make investments on neutral ground. The concept traces its roots back to medieval France and the Low Countries, where agricultural goods were traded for cash or debt. Most countries have a main exchange and many also have smaller, regional exchanges. A stock exchange is also called a bourse or simply an exchange. Stock market. A stock market may be a physical place, sometimes known as a stock exchange, where brokers gather to buy and sell stocks and other securities. The term is also used more broadly to include electronic trading that takes place over computer and telephone lines. In fact, in many markets around the world, all stock trading is handled electronically. The stock market is a place where long term securities are bought and sold. It is a market used to raise long term finances for the businesses and provides the businesses with the necessary liquidity. Stock markets can help the businesses to raise liquid funds at the time of their needs by selling or pledging their shares listed in the stock exchange. Stock markets are necessary to attract foreign capital in the form of foreign institutional investors to our country and this hot money decides the upward or downward movement of our indices. There are different participants in a stock exchange and each one of them has their own objectives. They carry their share trading on the basis of their objectives. The different kinds of share trading which are in practice are intraday trading, swing trading, commodity trading etc. Trading can be done both on the equities as well as on

commodities. Trading on commodities is known as commodity trading. Commodity trading includes trading of commodities like gold, crude, silver, nickel, lead etc. The Indian commodity market opens at 9:55 in the morning and functions till 11:30 in the night. The commodity trading is largely influenced by the change in price of the commodities in the international commodities market. In India a large number of investors do engage in commodity trading. Most of the large players in commodity trading are traders like jewelers etc. They see commodity trading as a tool to mitigate the risks of their business. In commodity trading the commodities are bought and sold in a lot or individually. The parties involved

in commodity trading may sometime go for margin money and if the value of their security falls down then they cannot hold it for a longer period of time as they are in short of funds. Intraday trading and swing trading are two tools of speculation. Swing trading is a practice where by the instrument is bought or sold at the end of volatility in price. So swing trading makes use of the volatility of the share price for a period of one week. Intraday trading is the most commonly used speculative tool in our stock exchanges. In intraday trading, the securities that are brought on that day are sold before the market closes for that day. So people who indulge in intraday trading are not real investors and they are really interested in making quick profits. Intraday trading can give you quick profits as well as the chances for loss making are many when compared to delivery trading. Most people who indulge in intraday trading end up making losses because they do not know anything about the stock exchanges and listening to others words them start intraday trading expecting quick profits. Most people who go for intraday trading use the margin money system and therefore they cannot hold their shares for a longer time due to the shortage of funds. The term marketplace or simply market is a reference to a place where goods and services are bought and sold. When the corporate structure was first developed in the late nineteenth century, the term market came to figuratively mean a place where securities such as stocks and bonds are bought and sold. The New York Stock Exchange is one example of a market where trading takes place and is the best known market in the world. However, other markets exist all over the globe where billions of dollars of assets are traded annually. Stock Exchanges There are two primary theoretical marketplaces where securities are traded. The term theoretical is used here because the market need not be a physical place where buyers and sellers meet to trade securities. This is akin to references to different markets for selling both new and used automobiles. The primary market for car sales refers to sales of cars between the manufacturer (or a dealership) and the buyer. A secondary market refers to used car sales and may be between any owner and seller. The point is that primary markets refer to new sales and secondary markets refer to used sales. A stock exchange is any legally recognized market where securities can be bought and sold. Corporations that issue stock are traded in these markets and typically wish to be listed as an officially traded company so that the shares of stock can be purchased by investors in a liquid market. In addition, stock exchanges are regulated such that both companies and investors must follow trading rules making the transition of ownership safer and less risky. The liquidity of the market refers to the ease with which ownership of a company in the form of stocks can be bought and sold without delay or complications afforded by selling the stock on a one-to-one basis between each company and investor.

Primary and Secondary Markets A primary market refers to any market where new shares of stock are sold. A corporation wishing to sell new shares of stock benefits from this sale because the stock is sold in the market directly by the issuing company. This is in contrast to secondary markets where shares of stock already in circulation and issued at a previous date are traded among investors. The company who issued the stock does not benefit directly from the sale of stock in a secondary market because the money paid for the stock goes to the seller in exchange for part ownership in the company. In this case, the company is not involved in the transaction. Buybacks and Secondary Markets Sometimes a corporation is interested in buying or selling shares of its own stock. In this case, the company does benefit from the transaction but the stocks are still considered to be trading in secondary markets because the stock was issued at an earlier date. When a company buys its own stock in a buyback, it is reducing the number of shares of stock available for purchase in the secondary market. The company may do this to protect itself from a buyout or to use the stock as compensation for the purchase of a new asset. Either way it signals to the secondary markets that the value of the company is changing and holders of the stock need to reevaluate the worth of their part ownership of the company. Conclusion The main difference between primary and secondary markets has to do with who benefits from the sale or purchase of a corporations stock. When new stock is issued, the company benefits from the sale and the cash flow from the sale of new stock can be used to invest in the companys operations. When stock is bought or sold between investors, the company does not directly benefit from the sale or purchase because money changes hands only between the two investors.

Money market
The money market is a component of the financial markets for assets involved in short-term borrowing and lending with original maturities of one year or shorter time frames. Trading in the money markets involves Treasury bills, commercial paper, bankers' acceptances, certificates of deposit, federal funds, and short-lived mortgage- and asset-backed securities.[1] It provides liquidity funding for the global financial system. The money market consists of financial institutions and dealers in money or credit who wish to either borrow or lend. Participants borrow and lend for short periods of time, typically up to thirteen months. Money market trades in short-term financial instruments commonly called "paper." This contrasts with the capital market for longer-term funding, which is supplied by bonds and equity. The core of the money market consists of banks borrowing and lending to each other, using commercial paper, repurchase agreements and similar instruments. These instruments are often benchmarked to (i.e.

priced by reference to) the London Interbank Offered Rate (LIBOR) for the appropriate term and currency. Finance companies, such as GMAC, typically fund themselves by issuing large amounts of asset-backed commercial paper (ABCP) which is secured by the pledge of eligible assets into an ABCP conduit. Examples of eligible assets include auto loans, credit card receivables, residential/commercial mortgage loans, mortgage-backed securities and similar financial assets. Certain large corporations with strong credit ratings, such as General Electric, issue commercial paper on their own credit. Other large corporations arrange for banks to issue commercial paper on their behalf via commercial paper lines.

Money market
Definition:Market for short-term debt securities, such as banker's acceptances, commercial paper, repose, negotiable certificates of deposit, and Treasury Bills with a maturity of one year or less and often 30 days or less. Money market securities are generally very safe investments which return a relatively low interest rate that is most appropriate for temporary cash storage or short-term time horizons. Bid and ask spreads are relatively small due to the large size and high liquidity of the market. Foreign Exchange Market A market which deals trading of currencies .For example, one may buy dollars or sell pounds on a market. Foreign exchange is one the largest and most liquid markets in the world. Trading occurs overthe-counter, and most of the major players are governments, banks, and speculators. Markets are often used in hedging strategies.