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What Is Stock Market ?
The share market, also known as the stock market or wequity market, is a platform where buying and selling of shares (or stocks) of publicly listed companies takes place.
The stock market is a dynamic and complex marketplace where individuals and institutions buy and sell shares of publicly traded companies. These shares represent ownership in a company, and their value fluctuates based on factors like company performance, economic conditions, investor sentiment, and global events.
The stock market operates through exchanges, such as the New York Stock Exchange (NYSE), Nasdaq, and others around the world, where buyers and sellers interact to trade stocks. It serves as a crucial mechanism for companies to raise capital by issuing shares to the public in exchange for investment,
Here are some key points about the share market:stock market is where shares of companies and other financial instruments are bought and sold. It’s a network of all-stock trading where investors and traders buy and sell stocks. These trades determine stock prices, reflecting the company’s perceived value and market conditions.
Shares/Stocks: Shares represent ownership in a company. When you buy shares of a company, you become a partial owner and are entitled to a portion of its profits (if any) and potential voting rights at shareholder meetings
Trading: Trading in the share market involves buying and selling shares through exchanges or over-the-counter markets. Exchanges such as the New York Stock Exchange (NYSE) or NASDAQ facilitate the trading of shares.
2.Tax Laws
Introduction to Tax Laws
Tax laws are the legal framework through which governments levy taxes on individuals and businesses. These laws dictate how taxes are collected, managed, and enforced. Taxation is a primary source of revenue for governments, enabling them to fund public services, infrastructure, and other societal needs.
History of Stock Trading:
The history of stock trading dates back several centuries and has evolved significantly over time.
Early Beginnings:
Antiquity: Stock trading can be traced back to ancient civilizations such as Rome and Greece, where merchants and investors traded shares of ventures and businesses.
Middle Ages: In Europe, trading guilds and merchant associations began issuing shares to finance trading voyages and expeditions. These early forms of shares were precursors to modern-day stocks.
Emergence of Stock Exchanges:
16th-17th Centuries:
It initially focused on trading shares of the Dutch East India Company and later expanded to include other businesses.
18th Century:
London Stock Exchange: Founded in 1801, it became a prominent center for trading government securities, stocks, and bonds.
Growth and Modernization:
19th Century:
Industrial Revolution: The rise of industrialization led to the formation of many new businesses. Stock exchanges expanded globally, including exchanges in New York, Paris, and Berlin.
Railroad Boom: The expansion of railroads in the United States fueled significant stock market activity and speculation.
20th Century:
Regulation: Governments began regulating stock markets to ensure fair trading practices and investor protection.
World Wars and Economic Crises: Stock markets experienced volatility during periods of global conflict and economic downturns, such as the Great Depression of the 1930s.
Modern Era:
Late 20th Century and Beyond:
Globalization: Advances in technology and communication facilitated cross-border trading and integration of global markets.
Electronic Trading: The advent of computers and the internet revolutionized stock trading, enabling faster transactions, real-time market data, and electronic trading platforms.
Diversification: Financial innovations introduced new financial products and derivatives, expanding investment opportunities.
Recent Developments:
21st Century:
High-Frequency Trading: Algorithms and automated trading systems dominate trading activities, executing trades at high speeds.
Global Financial Crises: Events like the Dot-com Bubble (2000) and the Financial Crisis (2007-2008) have impacted global markets, leading to regulatory reforms and changes in market dynamics.
Emerging Markets: Stock exchanges have emerged in developing countries, contributing to the globalization of capital markets and economic development.
Conclusion:
The history of stock trading reflects the evolution of economies, technological advancements, and regulatory frameworks over centuries. From its humble beginnings in medieval Europe to today’s global electronic markets, stock trading continues to play a crucial role in financing businesses, enabling investment opportunities, and shaping the global economy. Understanding this history provides insights into the development of financial markets and the factors influencing modern-day investing practices.
Types Of Share Market :
1. Primary Market
Definition: The primary market is where newly issued securities (stocks or bonds) are offered for sale for the first time by companies or governments.
Key Features:
Initial Public Offering (IPO): Companies raise capital by selling newly issued shares to the public for the first time.
Underwriting: Investment banks or underwriters facilitate the issuance process and ensure that the securities are sold to investors
2. Secondary Market
Definition: The secondary market is where existing securities are traded among investors after their initial issuance in the primary market
Key Features:
Exchanges and OTC Markets: Securities are traded on stock exchanges (e.g., NYSE, NASDAQ) or over-the-counter (OTC) markets (e.g., through dealers rather than centralized exchanges).
Liquidity: Provides liquidity for investors to buy and sell securities easily.
3.Equity market:
- The equity market, also known as the stock market or share market, specifically refers to the market where shares of publicly traded companies are bought and sold. Here’s an overview of the equity market
The equity market plays a crucial role in the global economy by providing companies with access to capital and offering investors opportunities for wealth creation and portfolio diversification - Definition and Basics:
Shares/Stocks: Equity represents ownership in a company. When individuals or institutions buy shares of a company’s stock, they become shareholders and own a portion of that company. - Marketplaces: Equity trading takes place on stock exchanges (such as the New York Stock Exchange (NYSE), NASDAQ, London Stock Exchange (LSE), etc.) and over-the-counter (OTC) markets.
