A stock market, stock exchange, or share exchange is an arrangement in which ownership interests are conveyed to multiple buyers and multiple sellers of shares, who collectively represent ownership interests in companies; these can include securities registered on a public share exchange. The shares are usually issued by a company in either debentures or common-stock shares. Securities typically offered on a share market include common stocks, preferred stocks, debt securities, mortgage notes, and other forms of publicly traded securities. Companies use a variety of techniques and tools to make their stocks available for purchase on the stock exchange. One method that companies use to list their securities is to list them on stock exchanges.
Most publicly traded companies on the stock market engage in activities such as issuing new shares to buyers, writing off or repaying debt, making investments, merging with other companies, or selling assets. There are many different types of activities performed on the stock market; however, the most well-known and widely utilized are financial activities and trading. Financial activities include selling the shares of stock to another party, as part of a transaction, creating a securities entity, borrowing money, making purchases and selling securities, and engaging in commodity and bond transactions.
When a company issues shares to the public, they do so on one of the many stock exchanges. The exchanges are online and operate twenty-four hours a day. In the United States, there are presently only a handful of nationwide exchanges, due to the fact that most people are familiar with the New York Stock Exchange (NYSE) and the National Association of Securities Dealers (NASD). In contrast, there are hundreds of exchanges throughout the rest of the world.
As with the financing of a company, the buying and selling of the shares on the stock market occurs through brokers. Buyers and sellers can meet at a broker or place their orders directly with the company, through a telephone call or through the internet. The process of placing an order on the exchange allows both buyers and sellers the opportunity to become involved in the process of buying and selling. This is not unlike purchasing a vehicle or appliance through an individual seller. Both the buyer and seller are able to provide information and specify the terms and conditions of the transaction.
There are two distinct categories of participants in the stock market: large companies and institutional investors. Large companies are corporations with more than $10 billion in assets who usually engage in the buying and selling of publicly traded shares. Institutional investors are groups of wealthy individuals, who usually invest in large companies. These investors generally control a large number of shares of a company and are able to increase the price of the shares above the company’s per-share earnings.
Dividends are paid on stocks annually and most Wall Street analysts use the Dow Jones Indices to determine whether to list a stock on the OTCBB. If you want to buy or sell stock on the Over the Counter Bulletin Board, you will need to be an active participant on the exchange for at least five days before you can begin trading. The five-day window will open on Friday and close on Sunday. Once you have entered your order, it is typically transferred to your brokerage account and you can begin either buying or selling the shares of stock you want. You can make money by trading in many different sectors, but you should know that there are also sectors that pay high dividends and you might want to consider them before making an investment.
