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The Place Where Stocks Are Traded: STOCK EXCHANGE
The Place Where Stocks Are Traded: STOCK EXCHANGE
If you want to trade stocks or invest in it, the stock exchange is a place to go to.It can be a physical place or a virtual market with electronic networks. Get to know about most famous stock exchanges, what roles they perform and a lot more in this article.
It is a place where stock brokers and traders can buy and sell stocks (also called shares), bonds, and other securities.In simple words, if you want to trade stocks or invest in it, the stock exchange is a place to go to.
It can be a physical place or a virtual market with electronic networks.
Not only it provides the facilities of buying and selling but it also provides facilities for issue and redemption of securities and other financial instruments.The capital events in which payment of dividend and income of the investors is involved also takes place in stock exchange. To be able to trade in a certain stock exchange the company has to be listed there.
Most Famous Stock Exchanges you should know!
The biggest exchange in the world is the New York Stock Exchange(NYSE). It started 200 years ago in 1792. It has stocks like McDonald's, General electric, Citigroup, Coca-Cola, Wal-Mart and Gillette, which makes it a market of choice for the largest companies in America. It is the first type of exchange, where much of the trading is done face-to-face on a trading floor.
The second type of exchange is of the virtual sort called an over-the-counter (OTC) market. Nasdaq is the most popular one. Trading is done through a computer and telecommunication network of dealers.
Mostly every country has its own stock exchange. [America’s stock exchange is undoubtedly largest but it still represents a fraction of the total investment of the world. The other main financial markets are the home of London Stock Exchange and home of Hongkong Stock Exchange.
Most of the trading in the Indian stock market takes place on its two stock exchanges: the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
You must have heard of two terms in the news channel which are ‘sensex’ and ‘nifty’ and wondered what they are.
Well, sensex is related to BSE and Nifty is related to NSE.
What role it performs!
1)Raises Capital For Businesses: It provides facilities to the companies to raise capital for expansion through selling shares to the investing public.
2)Mobilizes Saving for Investment
3)Facilitates Company Growth
4)Creates investment opportunities for Small Investors
5)Raises capital for Govt development Projects
What Companies need to get themselves registered in Stock Exchanges?
1)New York Stock Exchange: A company must have issued at least a million shares of stock worth $100 million and must have earned more than $10 million over the last three years to get listed on the New York Stock Exchange (NYSE)
2)NASDAQ Stock Exchange: A company must have issued at least 1.25 million shares of stock worth at least $70 million and must have earned more than $11 million over the last three years to get listed on the NASDAQ.
3)London Stock Exchange: The main market of the London Stock Exchange has requirements for a minimum market capitalization (£700,000), three years of audited financial statements, minimum public float (25 per cent) and sufficient working capital for at least 12 months from the date of the isting.
4)Bombay Stock Exchange: Bombay Stock Exchange (BSE) has requirements for a minimum market capitalization of ?250 million (US$3.7 million) and minimum public float equivalent to ?100 million (US$1.5 million)
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