What Is Share Market
Make Money From Shares
15th Sept 2012
What is share market? Put it simply, it is the place where shares or stocks are bought and sold. In the financial
markets ,to “trade” means to buy and sell. And you obviously do not like the idea of having to call around your
neighborhood trying to find a buyer for your stocks or seller to sell you a stock you are
There are two basic ways exchanges execute a
trade i.e :
1)On the exchange floor
The floor of the stock exchange is the
location for market transactions in stock exchanges. It is the physical location of buying and selling stocks on a
stock exchange. On the floor of the stock exchange, brokers and traders buy and sell stocks for their various
With the advent of electronic trading
platforms, the floor of the exchange is being slowly eroded .However, this method of trading is still active
today and exist side by side with electronic trading platforms complementing each other.
The New York Stock Exchange (NYSE) operate out of the traditional exchange
floor while Nasdaq uses electronic trading platform. These two exchanges alone account for the trading
of a substantial portion of equities in North America and worldwide.
Knowing the differences of these two stock exchange will help you better understand the function of a stock
exchange and the mechanics behind the selling and buying of stocks.
On the NYSE, all trades occur in a physical
place on the trading floor in New York City.
The Nasdaq, on the other hand, operates out
of a telecommunications network through an elaborate system of companies electronically connected to one
In the NYSE, buying and selling is carried
out through an auction process. The highest bidding price will be matched with the lowest asking price
The Nasdaq on the other hand transact the buying and selling
process through dealers.
Ensuring A Smooth Trading
The specialists in NYSE and the market
makers in Nasdaq are in charge of matching up buyers and sellers to keep the flow of trading going. They help
ensure a smooth and orderly markets for clients. Similar to traffic control , they will work to match the bidders
with the askers to ensure the completion of as many orders as possible every trading day.
As there are many blue chips companies
listed on NYSE , the companies here are perceived to be more well established and more stable.
The Nasdaq attracts many of the businesses
dealing with electronics or the internet. While the stocks are perceived as belonging to the high-tech market, they
are considered to be growth oriented but more volatile.
Other than United States, there are many
stock exchanges located around the world. The two other main stock exchanges are financial hubs are London Stock
Exchange in London , UK and Hong Kong Stock Exchange in Hong Kong, China.
Many investors look at the foreign markets
with envy when indexes in some of them produced up to triple-digit returns . The RTS Index in Russia gained 72% in
the first nine months of 2005 while earlier on in 2003, the SETI 100 in Bangkok rose a whopping
With electronic connectivity so highly
developed now, it has become much easier to buy or sell overseas stocks. As such, opportunities to make it
rich is no longer restricted to local market now.
What Is Share Market - Key Fundamentals Before You
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