Stock Exchange and how it works

    Stock Exchange and how it works


    The Stock Exchange is a stock market that collects, issues, and trades stocks, bonds and other securities, allowing companies to support their capital by giving investors part of their ownership. [1] The exchange is defined as markets that include exchanges of securities [2] Another definition of stock exchange is that it is an
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    activity that depends on the purchase and sale of shares within a specific general price level of each day. [3] How the Stock Exchange Works Stock Exchange (Securities) N by dividing the market into two types; the two main market and secondary market. The main market is selling new securities for the first time through the implementation of a series of IPO offers. Founders often acquire most of the securities. In the secondary market, all subsequent transactions are carried out and many investors are involved in the market. [1] The stock exchange usually conducts private trading in stock companies through a combination of exchanges between sellers and buyers; stocks traded are listed and can be implemented electronically, including There are two processes: the purchase and sale of shares and all securities. [1] The purchase of securities (shares) that increase or fall in prices, and these are encouraging reasons for many investors to buy a group of them in most professional sectors, called this thing called diversification, From the purchase of diversified stocks is to get money by dealing with the shares of companies that are expected to make good profits, leading to a rise in the price of its shares, while the sale of securities (shares) is a deal between the seller and the buyer; Sellers seek (4) The benefits of investing in the stock exchange The investment in the stock exchange offers a range of benefits to individuals and enterprises. These benefits are summarized according to the following points: [5] ] Benefit from the growth of the economy and the profits of enterprises: Because growth in the economic sector contributes to the production of income, which leads to the strengthening of demand for products, resulting in an increase in the value of private cash revenues in companies. Easy to buy: Any investor can buy securities and stocks in an easy way by having a broker or financial analyst, or by relying on the Internet. This is the behavior of the majority of investors who aspire to profit from the profits of companies whose stock prices are growing over time. Many investors prefer to get money by buying shares of companies that offer them financial profits because they achieve moderate growth. Easy to sell: If the investor needs money, it is possible to sell some of his shares at any time, but as a result of the volatility of securities prices may show the risk of bearing the loss due to this sale. The disadvantages of investing in the stock exchange The investment in the stock exchange sometimes leads to the emergence of a set of negatives, and the following information about them: [5] Loss of the entire investment: It is possible that the investor will lose its full investment in the event of losing the company and decreased prices of its shares, and decided the rest of investors to sell their shares, To the loss of all the initial investment of each investor, resulting in the loss of all the money in the savings or inventory. The need for a lot of time: the investment in the stock exchange takes a long time to choose between enterprises, and determine the ability of each of them to achieve profits; through the follow-up of annual reports and financial statements and developments in companies, in order to obtain the best investment price to participate in the market Money bills. The emergence of fluctuations in stock prices: The stock market faces a significant variation in the prices of shares and all other securities, which affects the decisions of individuals in buying and selling. The emergence of competition: New investors face competition with professional investors or traders who have the time to invest, unlike individual investors who need to know how to gain this advantage. Market Conditions The success of the stock market in the investment process depends on the existence of a set of conditions, the most important of which are: [6] Volume: a prerequisite for the stock exchange; as it contains many companies contributed to the increase in the total value of shares traded, Diversification of risk, lack of focus on a limited number of securities. Liquidity: The possibility of obtaining money through securities, and when the size of the stock market is large, the liquidity ratio is high in the market. Transparency: The ability of the stock market to provide appropriate information continuously about the companies in them and all movements that involve buying and selling to investors, and this leads to the reduction of manipulation of financial information, or a group of investors financial data before others. Stability: The ability of the stock market to be unaffected by sharp price fluctuations due to illogical expectations, and the impact of rumors on securities prices, which lead to their rise or fall,
    This results in an increase in the value of private cash receipts in companies. Easy to buy: Any investor can buy securities and stocks in an easy way by having a broker or financial analyst, or by relying on the Internet. This is the behavior of the majority of investors who aspire to profit from the profits of companies whose stock prices are growing over time. Many investors prefer to get money by buying shares of companies that offer them financial profits because they achieve moderate growth. Easy to sell: If the investor needs money, it is possible to sell some of his shares at any time, but as a result of the volatility of securities prices may show the risk of bearing the loss due to this sale. The disadvantages of investing in the stock exchange The investment in the stock exchange sometimes leads to the emergence of a set of negatives, and the following information about them: [5] Loss of the entire investment: It is possible that the investor will lose its full investment in the event of losing the company and decreased prices of its shares, and decided the rest of investors to sell their shares, To the loss of all the initial investment of each investor, resulting in the loss of all the money in the savings or inventory. The need for a lot of time: the investment in the stock exchange takes a long time to choose between enterprises, and determine the ability of each of them to achieve profits; through the follow-up of annual reports and financial statements and developments in companies, in order to obtain the best investment price to participate in the market Money bills. The emergence of fluctuations in stock prices: The stock market faces a significant variation in the prices of shares and all other securities, which affects the decisions of individuals in buying and selling. The emergence of competition: New investors face competition with professional investors or traders who have the time to invest, unlike individual investors who need to know how to gain this advantage. Market Conditions The success of the stock market in the investment process depends on the existence of a set of conditions, the most important of which are: [6] Volume: a prerequisite for the stock exchange; as it contains many companies contributed to the increase in the total value of shares traded, Diversification of risk, lack of focus on a limited number of securities. Liquidity: The possibility of obtaining money through securities, and when the size of the stock market is large, the liquidity ratio is high in the market. Transparency: The ability of the stock market to provide appropriate information continuously about the companies in them and all movements that involve buying and selling to investors, and this leads to the reduction of manipulation of financial information, or a group of investors financial data before others. Stability: The ability of the stock market to be unaffected by sharp price fluctuations due to irrational expectations and the impact of rumors on securities prices, which lead to their rise or fall. This results in a deviation of the prices of securities from their real value, Issued by, such as companies.
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