“A stock market is also known as the equity market. This is a private or public market which is meant for the trading of a company stock and the derivatives of company stock for an agreed price. The stock traded is mostly the securities which get listed on a stock exchange; the stock market also trades stocks which are only traded privately.”

What are the securities traded in the stock market?

Typically, the stocks that are listed as “securities” in the major stock exchange companies of a particular country are traded in the stock market.

Unlisted securities sell for a low price and seldom do traders bid on them.

For example gold is a security, oil is a security, cement is a security and every kind of product in to a business with a certain amount of liquidity can be listed as a security.

Different companies are involved in businesses operating on securities. For example, cement is marketed by different companies under different brand names. So, when you stock trade on cement securities you will also be considering the brand names associated with the security, to make sure that you invest in stocks operated by branded managements.

Securities, in the overall picture have the similar price as declared in the stock market, but there are likely to be minor differences based on brands.

What are stock exchange firms?

• NYSE, NASDAQ, Amex, OTCBB, and Pink Sheets are the major US stock exchanges.
• London Stock Exchange, Deutsche Börse, Euronext.are the major European Stock Exchanges.

Every country has their own stock exchange offices in their country. The tradable stocks of each country are listed in the stock exchanges of that particular country; the prices of securities are mostly determined by the regional, national and global conditions of the securities, by the trading trends of the product, based on demand and supply trends.

What is the purpose of a stock market?

The stock market is a major source for any company to raise additional capital for the propagation and expansion of the business by selling shares of ownership of the company in a public market.
Stocks with high liquidity can be sold easily in the market.

Price of Stock and the economy of the country ?

• The prices of stocks play an important role in the economy of any country. If the stock market is in the uptrend then it shows an improving economy.
•  If the stock market is in the downtrend then it denotes a declining economy.
• Increased prices of stocks denote a improving business associated with the product.
• Decreasing prices of stocks denote a declining of businesses associated with that product.
• The prices of stocks also play a major role in the wealth of individual households and the overall buying and selling of commodities in the country.

What is a central bank?

The Central Banks watch the behavior and trends in the stock market and they play a vital role in regulating the financial system of any economy. The smooth functioning of the stock market plays a vital role in the economic prosperity of the businesses involved and thereby also the country involved.

The stock markets are traded with a certain degree of financial risk; however, watchful investors feel the risk has returns which are better than investing the money in regular banks, provided watchful stock marketing is practiced.