Stock Exchange

Stock exchange is an important element of stock market. It helps to do transactions of financial tools between buyers and traders. A stock exchange in India adheres the set of rules and instructions. Which are make by the Securities and Exchange Board of India(SEBI). The authority protects the interest of investors and aims to promote the stock market of India.

What is Stock Exchange?

The stock exchange serve as the market where financial instruments like bonds, commodities and stocks are trade. It works like a platform for buyers and sellers to come together and trade under the rules of SEBI. However, only register companies are allow to trade.

How It Works?

A stock exchange works independently as no one controls it. The entire process works by orders and conducted over electronic limit book. In such these process computer matches orders automatically. The major benefits of order driven market is that it have transparency and shows every transaction publically.

Institutional and retail customers can avail the benefits associated with direct market access. Buyers place their orders by using trading terminals.

Benefits of Stock Exchange

Increased Value

By listing with the reputable stock exchange can increase the value . Company can go cash in on their market value by increasing the number of shareholders.

Capital Access

One of the effective way to avail the cheap capital for the company. Is by issuing the stock market exchange of company for the buyers to acquire. Listed companies can have more capital by this method.

Collateral Value

All the lenders have accepted the securities as the collateral and extend credit facilities against them. A listed company is more likely to avail a faster approval for their credit request.

Liquidity

Listing helps the shareholders to avail the better advantage of liquidity as compare to others. It allows share transactions and helps them to be out of risks.

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Investment Methods

  • Primary Market

This market creates the platform for where firms offers their new stock options and bonds for the general public. It is a market where company enlist for first time.

  • Secondary Market

It is also know as stock market. It is a trading platform for the buyers and the investors. Here buyers can acquire shares of companies who have listed.