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The Stock Market

Stock markets are financial markets. They exist to provide a means of trading for equity securities. Each security represent units of ownership in a business.

A stock exchange is a place where investment dealers act on behalf of clients to find buyers for clients’ securities. A stock exchange does not set prices for securities, however, the stock exchange set rules governing the trading of equity securities.

Companies must apply to list their shares for trading on an exchange. Each Exchange has regulation than qualify whether the company’s shares will be accepted for listing. If the company is listed, it must abide by the rules of the exchange. Companies receive a number of benefit from listing on the Stock Exchange. The most important is that marketability of the shares is increased.