Stock Market Today

The Stock market today takes a looks at the Introduction on Stock Market, Rewiews and Structures.
The Stock Market of Today is a more Centralised and automated system, This quite different compared to the Stock Market of years back which involves book keeping with a predominant features of cross trading. Perhaps in this present age, we are looking forward for a fully decentralised, fully automated Stock Market structure in the future.

 Stock market or an equity market or share market is that comprises of an aggregation of buyers and sellers of stocks (also called shares or quoted equities), which represent ownership claims on businesses; these may include securities listed on a public stock exchange, as well as stock that is only traded privately via private placements such as shares of private companies which are sold to investors through equity crowdfunding platforms. Investment in the stock market is most often done via stock brokerages via an electronic trading platform. Investment is usually made with an investment strategy in mind. The things to consider while making such investments are if you are buying /selling for short term holding /liquidating or long term. What this means is that you can buy shares to keep in the company’s book of registry for the purpose of making short profits or becoming a share holder with the motive of making medium to long term capital appreciation or ROI. Other are if you are buying for the purpose of receiving n upcoming and future dividends from the company as well as capital appreciation.

Some people prefer buying low price share otherwise known as penny stocks in anticipation that the company has a growth potential and if that happens then the shares of the company will appreciates as the company declares their profit or loss as the case may be. Some buy low price stock with strong fundamentals for growth has an investment tailored towards planning for the rainy days or retirement.

Stocks can be categorized by the country where the company is domiciled. For example, in Nigeria, the Nigerian Breweries Plc are domicile in Nigeria and traded on Nigerian Stock Exchange; Nestlé and Novartis are domiciled in Switzerland and traded on the SIX Swiss Exchange, so they may be considered as part of the Swiss stock market, although the stocks may also be traded on exchanges in other countries, for example, as American depositary receipts (ADRs) on U.S. stock markets. Similarly there are other companies in Nigeria that are listed in both the Nigerian Stock Exchange and the other Stock Exchanges.  

The stock market is considered to be highly volatile with high liquidity hence it is one of the most important ways for companies to raise money, along with debt markets which are generally more imposing but do not trade publicly. This allows businesses to be publicly traded, and raise additional financial capital for expansion by selling shares of ownership of the company in a public market. The liquidity that an exchange affords the investors enables their holders to quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less liquid investments such as property and other immoveable assets.

 

History has shown that the price of stocks and other assets is an important part of the dynamics of economic activity, and can influence or be an indicator of social mood. An economy where the stock market is on the rise is considered to be an up-and-coming economy. The stock market is often considered the primary indicator of a country's economic strength and development.

 

Rising share prices, for instance, tend to be associated with increased business investment and vice versa. Share prices also affect the wealth of households and their consumption. Therefore, central banks tend to keep an eye on the control and behavior of the stock market and, in general, on the smooth operation of financial system functions. Financial stability is one of the core mandates of central ba nks.

A currency that is relatively stable tends to trade with high gaining values against other currencies.

Exchanges also act as the clearinghouse for each transaction, meaning that they collect and deliver the shares, and guarantee payment to the seller of a security. This eliminates the risk of building the misconception as an individual buyer or seller that the counter party could default on the transaction. The Clearing system has a central security that controls and monitors outbound (sell) and inbound (buy) transactions. The money that the buyer brings in is used to settle the seller after other commissions like brokerage fees and Central Security Clearing System fees among others. However these fees are relatively small and affordable to encourage more participation in stock market business.

The smooth functioning of all these activities facilitates economic growth in that lower costs and enterprise risks promote the production of goods and services as well as possibly employment. In this way the financial system is assumed to contribute to increased prosperity, although some controversy exists as to whether the optimal financial system is bank-based or market-based.

Recent events such as the Global Financial Crisis and the Stock market crashes have prompted a heightened degree of scrutiny of the impact of the structure of stock markets, also (called market microstructure), in particular to the stability of the financial system and the transmission of systemic risk to National financial security.