Significant Role of Stock Exchange

1. Significant Role of Stock Exchange A stock market or a share market is an opportunity where the traders and investors can buy or sell the shares of different companies. The stock of all important companies is listed on the stock exchange. It is for the benefit of the companies to get listed on the stock exchange and all the major companies wanted to list their stocks on various exchanges. The shares are the pieces of the ownership of a company. The more number of shares the trader purchase the more is the ownership of the trader in the company. The price of the shares fluctuates continuously. The main phenomenon which decides the price of the share is the phenomenon of demand and supply. If the demand of a share goes up its prices go up. If the demand of share goes down there is a downfall in the prices of the share. In other words, if the buyers of a particular share increase its price increases and if the sellers increase the price of the stock goes down. The stock exchange ensures the safety of the transactions made. There are various rules and regulations that the trader has to follow in order to trade in the stock market. The organization like SEBI makes the laws for the stock market and monitors the following of these rules. They take action against the traders who are following unfair techniques to trade and are taking the undue advantage of the market. The traders trade in the Intraday, short-term, and long-term trading fashion. In the Intraday trading, the trader buys and sells the stocks on the same day. The price fluctuations in the day will decide the profits or the loss in the trades. In short-term trading, the trader keeps the stocks from more than one day to several months. In short-term trading, the profits incurred is more than that for intraday trading. The brokerage charges for short-term trading are more than that of intraday trading. The traders can trade on the basis of stock market tips provided by some reputed advisory firms.