Millions of people around the world invest in stock market and their earnings depend on its day to day working. Trading of millions of money is done on daily basis in capital market. People who trade in it range from small stock investors to large hedge fund traders. They usually take help of professionals to look after their investments.

There are two kinds of equity markets, one is the physical one where all the transactions like bidding and exchanging takes place verbally. This type of method is also called ‘open outcry’. Another kind is the virtual market which is made up of network of computers, and electronic trading is done by traders. Usually, a capital market’s model working way is when potential buyer bids a price and seller asks for a price; if these two match, the stock will be sold. But this will happen on first-come-first-served formula if there is more than one bidder or seller. Such markets are formed to exchange securities between buyers and sellers. As a shareholder, an individual owns a portion of the company's profits. Few decades ago, buyers and sellers of stick exchange used to be individual investors who were rich, but stock market today have institutions as its buyers and sellers. Mutual funds, insurance companies, pension funds, exchange-traded funds, banks and various other financial institutions are the ones who trade at stock exchange.

Thanks to the rise of institutional investors; therefore, many improvements are done in the functioning of the equity market.

Bookmark/Search this post with:

 •    •    •    •    •    •    •    •    •    •