Ways To Understand The Stock Market
If you want to be a trader then you should learn the ways on how stock market works so that you an make an easy trading once you engage in it. There are several information that you must know before starting to trade and the top most important question that needs answering before trading is what really is a stock market and what does a stock market usually does?
What Really Is A Stock Market?
A large collection of exchanges would be the best definition of a stock market, in general it is where the floating and trading of the stocks of different companies occur. Most of the countries of the world if not all, have practically one stock market which they are using for the stocks trading of the different companies within the country. Since there are stock markets in each of the countries in the world, global trading is also done in one of these stock markets particularly on financial centers of selected countries.
For a stock to be enlisted in the stock market and traded, there are certain criterias that are imposed and must be met before any stock is listed for trade in the stock market. The world have a lot of regulatory bodies intended to take full responsibility to better manage and control the stocks in the global market. For a much better control of the stocks that are traded in stock markets, each individual countries have their own regulatory bodies that will allow them to manage and control the stocks flow. These regulatory bodies are also the ones that provides security to the investors in the stock market upon listing the stocks to be traded. What is most convenient about these regulatory bodies is that they are not related to government agencies and policies since they have their own policies to enforce as an independent regulatory committee.
Stock Market Security Types
The usual available securities in the stock market are over the counter and the ones that are listed. The listed types of securities in the market are assigned in securing the stock market’s trading activities. The most important requirements in stock market security when they are enlisting is being able to meet the financial and reporting criteria. After a security has met the needed financial and reporting criteria and then approved by the regulatory bodies, they then are listed to the exchanges they need to go. The assigning of the newly listed security is done by the regulatory bodies,they are given the trade post where they will serve their purpose and assigned to any company at random.
The use of an over the counter security is done by companies who are also not listed. Since over the counter security is not listed, most of the companies that hires its service are the small private ones. Due to outside investments, over the counter securities in stock markets are still available.